1. Cutter Enterprises purchased equipment for $72,000 on January 1, 2018. The equipment is expected to...

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Accounting

1. Cutter Enterprises purchased equipment for $72,000 on January1, 2018. The equipment is expected to have a five-year life and aresidual value of $6,000.

Using the sum-of-the-years'-digits method, depreciation for 2019and book value at December 31, 2019, would be:
Multiple Choice
$19,200 and $30,800 respectively.
$19,200 and $28,800 respectively.
$17,600 and $26,400 respectively.
$17,600 and $32,400 respectively.
2. Cutter Enterprises purchased equipment for $66,000 on January1, 2018. The equipment is expected to have a five-year life and aresidual value of $7,500.

Using the sum-of-the-years'-digits method, depreciation for 2018and book value at December 31, 2018, would be: (Do notround depreciation rate per year)
Multiple Choice
$22,000 and $36,500 respectively.
$19,500 and $46,500 respectively.
$22,000 and $44,000 respectively.
$19,500 and $39,000 respectively.

Answer & Explanation Solved by verified expert

4.3 Ratings (719 Votes)

1 Depreciable cost Cost price Residual value 72000 6000 66000 Depreciation per year Depreciable cost x Years outstandingSum of years Depreciation for year 2018 66000 x 515 22000 See Answer

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