Answer:
Units of production = $4250
Straight line depreciation expense = $5,000
Double declining method = $7.777
Explanation:
The depreciation method to he used wasn't stated, so I calculated the depreciation expense using 3 depreciation methods
Straight line depreciation expense = (Cost of asset - Salvage value) / useful life
(35,000 - 5,000) / 6 = $5,000
The depreciation expense each year would be $5000
Depreciation expense using the double declining method = Depreciation factor x cost of the asset
Depreciation factor = 2 x (1/useful life)
2 / 6 = 0.3333
Deprecation expense in year 1 = 0.3333 x $35,000 = $11,666.67
Book value = $35,000 - $11,666.67 = $23,333.33
Depreciation expense in year 2 = $23,333.33 × 0.3333 = $7.777
Depreciation expense using units of production = ( hours used in year / total estimated hours of the machine) x (Cost of asset - Salvage value)
(1,700 / 12,000) x (35,000 - 5,000) = $4250
I hope my answer helps you
The Cainas Cookies' depreciation expense for year 2 is C. $4,250.
The correct choice of answer is not A. $7,292 , B. $6,250 , or D. $4,598.
Data and Calculations:
Cost of commercial oven = $35,000
Salvage value = $5,000
Depreciable amount = $30,000 ($35,000 - $5,000)
Estimated useful life = 12,000 baking hours
Depreciation rate per baking hour = $2.50 ($30,000/12,000)
Depreciation expense for Year 2 = $4,250 ($2.50 x 1,700)
Thus, the depreciation expense for year 2 is $4,250.
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