Aggie, Inc.
Aggie, Inc. purchased a truck at a cost of $12,000. The truck has an estimated salvage value of $2,000 and an estimated life of 5 years, or 100,000 hours of operation. The truck was purchased on January 1, 2011, and was used 27,000 hours in 2011 and 26,000 hours in 2012.
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Refer to Aggie, Inc.'s information presented above, what method of depreciation will maximize depreciation expense in 2011?
A) Straight-line
B) Double-declining-balance
C) Units-of-activity
D) All methods produce the same expense in 2011.

Question

Aggie, Inc. 
Aggie, Inc. purchased a truck at a cost of $12,000. The truck has an estimated salvage value of $2,000 and an estimated life of 5 years, or 100,000 hours of operation. The truck was purchased on January 1, 2011, and was used 27,000 hours in 2011 and 26,000 hours in 2012.
-
Refer to Aggie, Inc.'s information presented above, what method of depreciation will maximize depreciation expense in 2011?
A) Straight-line
B) Double-declining-balance
C) Units-of-activity
D) All methods produce the same expense in 2011.

Quizplus · Accepted Answer

The Answer is B

Aggie, Inc. Aggie, Inc. Purchased a Truck at a Cost of $12,000