7. Refer to the information for Wexford Co. is comparing the straight-line and d

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7. Refer to the information for Wexford Co. is comparing the straight-line and double-declining-balance depreciation methods. Of these tw Im es the larger expense and larger tax savings in 2017 method creates e depreciation creates the larger expense, while double-declining-balance depreciation creia larger tax savings. savings b. Straight-line depreciation creates both the larger expense and the larger tax c. Double-declin ing-balance depreciation creates both the larger expense and the larger tax savings d. Double-declining-balance depreciation creates the larger expense, while straight-line depr larger tax savings. Norwood, Inc Norwood, Inc, purchased a crane at a cost of $80,000. The crane has an estimated residual value of $5,000a 2,700 hours in 2017 and 2,600 hours in 2018 estimated life of eight years, or 12,500 hours of operation. The crane was purchased on January 1, 2017, ar 8. Refer to the information for Norwood, Inc Based on this information, what method of depreciation will produce the maximum depreciation expense a. Straight-line b. Double-declining-balance c. Units-of-production d. All methods produce the same expense in 2017 9. Refer to the information for Norwood, Inc If Norwood uses the units-of-production method, what is the depreciation rate per hour for the equipmer a. $4.00 b. $5.00 c. $6.00 d. $7.50 10. Land is not depreciated because it a. appreciates in value. b. does not have an established depreciable life c. has a useful life that is limited to the period of time a company is in business. d. has an unlimited life 11. Which of the following sets of factors is needed to calculate depreciation on plant and equipmen a. The asset's acquisition cost, replacement cost, and its estimated residual value b. The estimated residual value of the asset, its replacement cost, and its market value c. The asset's replacement cost, its estimated life, and its estimated residual value Copyright Cengage Learning. Powered by Cognero

Explanation / Answer

Dear student, only one question is allowed at a time. I am answering the first question

7)

Double declining balance depreciation rate

= 2 x Straight line depreciation rate

As we can find from the above formula, depreciation under double declining balance method is charged at double the straight line rate. So, larger expense and larger tax saving is created in the initial years under double declining balance method in comparison to straight line depreciation method

So, option c is the correct option

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