The Amount of Depreciation Expense for a Fixed Asset Costing

question 227

True/False

The amount of depreciation expense for a fixed asset costing $95,000, with an estimated residual value of $5,000 and a useful life of 5 years or 20,000 operating hours, is $21,375 by the units-of-output method during a period when the asset was used for 4,500 hours.

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Definitions:

Liquidation

The process of closing a business and distributing its assets to claimants.

Capital Contribution

The cash, property, or other assets that investors or owners provide to a business in exchange for an ownership interest or equity.

RULPA

The Revised Uniform Limited Partnership Act, designed to update and standardize the law governing limited partnerships across the states.

Limited Partner

An investor in a limited partnership, who contributes capital but does not take part in management and is only liable to the extent of their investment.