A company purchased a weaving machine for $315,850. The machine has a useful lif

Question

A company purchased a weaving machine for $315,850. The machine has a useful life of 8 years and a residual value of $17,500. It is estimated that the machine could produce 765,000 bolts of woven fabric over its useful life. In the first year, 112,500 bolts were produced. In the second year, production increased to 116,500 units. Using the units-of-production method, what is the amount of depreclation expense that should be recorded for the second year? O $89,310 O $48.100 O $46449 $43.875 O $45.435

Explanation / Answer

Answer e. $45,435 Depreciation per Unit = ($315,850 - $17,500) / 765,000 bolt Depreciation per Unit = $0.39 per bolt Dep. Exp. For Second Year = 116,500 bolts X $0.39 Dep. Exp. For Second Year = $45,435

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