Equipment with a cost of $390,000 and estimated residual value of $60,000 is expected to have a useful life of 30,000 hours

Equipment with a cost of $390,000 and estimated residual value of $60,000 is expected to have a useful life of 30,000 hours. During August, the equipment was operated 700 hours. What amount should be recorded as depreciation expense for the month?

A) $8,400.

B) $7,700.

C) $9,100.

D) $7,000.

Answer: B

A company purchases a piece of equipment on January 1, 2021, for $70,000 and the equipment has an expected useful life of five years. Its residual value is estimated to be $10,000. Assuming the company uses the straight-line depreciation method, what should be the balance in accumulated depreciation for the equipment as of December 31, 2023 (three years later)?

A) $44,000.

B) $32,000.

C) $36,000.

D) $42,000.

Answer: C

A building was purchased for $50,000. The asset has an expected useful life of six years and depreciation expense each year is $8,000 using the straight-line method. What is the residual value of the building?

A) $0.

B) $2,000.

C) $4,000.

D) $6,000.

Answer: B