A company purchased equipment at the beginning of 2021 for $500,000. The equipment is depreciated on a straight-line basis

A company purchased equipment at the beginning of 2021 for $500,000. The equipment is depreciated on a straight-line basis with an estimated useful life of nine years and a $50,000 residual value. At the beginning of 2024, the company revised the equipment's useful life to a total of seven years (four more years) because of changing customer demand. The company also revised the expected residual value to $30,000. What depreciation expense would the company record for the year 2024 on this equipment?

A) $87,500.

B) $80,000.

C) $50,000.

D) $75,000.

Answer: B

A company purchased equipment at the beginning of 2021 for $650,000. In 2021 and 2022, the company depreciated the asset on a straight-line basis with an estimated useful life of eight years and a $10,000 residual value. At the beginning of 2023, due to changes in technology, the company revised the useful life to a total of six years (four more years) with zero residual value. What depreciation expense would the company record for the year 2023 on this equipment?

A) $108,333.

B) $106,667.

C) $122,500.

D) $81,667.

Answer: C

A company purchased a tractor on January 1, 2021, for $65,000. The tractor's useful life is estimated to be 30,000 miles with an expected residual value of $5,000. If the company used the tractor 5,000 miles in 2021 and 3,000 miles in 2022, what is the balance for accumulated depreciation at the end of 2022 using the activity-based method?

A) $38,000.

B) $6,000.

C) $16,000.

D) $10,000.

Answer: C