Fabian Woodworks ​

question 96

Multiple Choice

Fabian Woodworks
​
This company purchased a truck at a cost of $12,000. The truck has an estimated residual value of $2,000 and an estimated life of 5 years, or 100,000 hours of operation. The truck was purchased on January 1, 2019, and was used 27,000 hours in 2019 and 26,000 hours in 2020.
-Refer to Fabian Woodworks. What amount will be reported as depreciation expense over the 5-year life of the equipment?

• A)$12,000
• B)$ 8,000
• C)$10,000
• D)$ 4,000

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Definitions:

New Products

Items that have been introduced to a market for the first time or significantly improved in terms of technology, composition, or usability.

Indirect Activity

Activities that support the production process but do not directly contribute to the final product or service.

Human Resources

The department within an organization dealing with the recruitment, administration, and training of employees, as well as other personnel-related activities.

Value Chain

A series of activities and processes that a company performs to bring a product or service from conception to delivery to the end consumer, adding value at each step.