A machine with a cost of $65,178.00 has an estimated residual value of $4,473.00 and an...

A machine with a cost of $65,178.00 has an estimated residual value of $4,473.00 and an estimated life of 6 years or 18,863 hours. It is to be depreciated by the units-of-production method. What is the amount of depreciation for the second full year, during which the machine was used 4,557 hours?

Select the correct answer.

$20,235.00

$15,745.97

$10,117.50

$14,665.36

Expert Solution

WORKING NOTES:
	CALCULATION OF THE DEPRECIATION AS PER UOP METHOD
	Purchase Cost of Machine	$ 65,178
	Less: Salvage Value =	$ 4,473
	Net Value for Depreciation (A)	$ 60,705
	Expected to Produce Hours (B)	18,863	Hours
	Depreciation per Hours = (A/B)	$ 3.218	Per Hours


SOLUTION =
	CALCUATION OF DEPRECIATION EXPENSES OF YEAR 2
	Year	Assets Cost	Machine Hours Used	X	Rate Per Hours	=	Depreciaiton Expenses
	Purchase Price	65,178
	Year 2		4,557	X	3.218	=	$ 14,665.36

Answer = Option 4 = $ 14,665.36

ekkarill92 answered 2 years ago

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