70.2K

Verified Solution

Link Copied!

On April 30, Year 1, Faith Inc., purchased machinery for $88,000. The machinery is expected to have an 8-year life and an estimated residual value of $8,000. Faith uses a calendar year-end for financial reporting. Refer to the information above. Assume that in its financial statements, Faith Inc., uses straight-line depreciation, with fractional years rounded to the nearest whole month. Depreciation expense recognized on this machinery in Year 1 and Year 2 will be: Multiple Choice $2,333 in Year 1 and $7,000 in Year 2. $5,833 in Year 1 and $10,000 in Year 2. $6,667 in Year 1 and $10,000 in Year 2. $10,000 in Year 1 and $10,000 in Year 2.

On Apri 30, Year 1, Faith inc, purchased machinery for $88,000. The machinery is expected to have on 8 -year life and an estimeted residual value of $8,000. Faith uses a calendar year-end for financial reporting. Refer to the information above. Assume that in its financial statements, Faith inc, uses straight-line depreciation, with fractional years rounded to the nearest whole month. Depreciation expense recognized on this machinery in Year 1 and Year 2 will be: Mutiple Choice $2,333 in Yeat 1 and $7,000 in Year 2 . $5,833 in Year 1 and $10.000 in Year 2. $6,667 in Year 1 and $10,000 in Year 2 $10,000 in Year 1 and $10,000 in Year 2

Answer & Explanation Solved by verified expert

See Answer