On January 1, 2016, Digger purchased some equipment for $29,600. The anticipated life of the equipment...
On January 1, 2016, Digger purchased some equipment for $29,600. The anticipated life of the equipment was five years and residual value was estimated to be $4,100. The machine was expected to produce 600,000 units. In January of 2016, 35,000 units were produced and production was doubled in February. The company uses the activity depreciation method. What is the amount of depreciation expense for the month of February?
$1,487.50
$3,453.33
$2,975.00
$637.50
Homework Answers
Answer : $2,975.00
cost of Equipment = $ 29,600
Salvage value = $4,100
Depreciable Value of the Equipment = $29,600-$4,100 = $25,500
Total Activity = 600,000 units
Activty Rate = 25,500/ /600,000 = 0.0425 Per unit
Depreciation For Februrary =(35,000*2)*0.0425 = $2,975.00 Answer
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