A company purchased office equipment for $130,000 on Mar, 2021. The estimated service life is four years with a $40,000 residual value

A company purchased office equipment for $130,000 on Mar, 2021. The estimated service life is four years with a $40,000 residual value. The company records partial-year depreciation based on the number of months in service. The balance of accumulated depreciation for the year ended December 31, 2022, using straight-line depreciation, is:

A) $41,250.

B) $22,500.

C) $88,750.

D) $18,750.

Answer: A

A company purchased a computer system at a cost of $40,000. The estimated useful life is 10 years, and the estimated residual value is $5,000. Assuming the company uses the double-declining-balance method, what is the depreciation expense for the second year?

A) $8,000.

B) $7,000.

C) $5,600.

D) $6,400.

Answer: D

Best Construction purchased a delivery truck on June 1, 2021. The following information is available:

Cost = $90,000

Estimated service life = 5 years

Estimated residual value = $15,000

Calculate the balance of accumulated depreciation for the year ended December 31, 2022, using straight-line depreciation.

A) $21,250.

B) $17,500.

C) $23,750.

D) $30,000.

Answer: C

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