Norwood, Inc. Norwood, Inc. Purchased a Crane at a Cost of $80,000

question 195

Multiple Choice

Norwood, Inc.

Norwood, Inc. purchased a crane at a cost of $80,000. The crane has an estimated residual value of $5,000 and an estimated life of eight years, or 12,500 hours of operation. The crane was purchased on January 1, 2017, and was used 2,700 hours in 2017 and 2,600 hours in 2018.

-Refer to the information for Norwood,Inc.
What amount will Norwood,Inc.report as depreciation expense over the eight-year life of the equipment?

• A)$60,000
• B)$72,000
• C)$75,000
• D)$80,000

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Definitions:

Company Logo

A graphic mark, emblem, or symbol used by enterprises to aid and promote public identification and recognition.

Motor Vehicle Licence

A document granting the legal permission to drive a motor vehicle on public roads.

Operating Lease

A leasing agreement allowing a lessee to use an asset, but the lease does not transfer ownership of the asset to the lessee.

Risk Of Obsolescence

The risk that a product or service will become outdated or no longer useful due to advancements in technology or changes in market preferences.