On January 1, 2013, LaMonte Paint and Repair purchased a piece of equipment that cost $300,000.It has an estimated useful life 10 years over which it was expected to produce 100,000 units of output.The equipment is expected to have an estimated residual value of $80,000.The company amortizes all equipment using the accelerated method at a rate of 20%.In the first two years of operation, the asset produced units of output as follows: 2013, 18,000 units; 2014, 15,000 units.The accounting year ends December 31.What is the amount of depreciation expense and in the accumulated depreciation account (after adjusting entries) at the end of 2014? $\begin{array}{rrr}
&\text { Depreciation } & \text { Accumulated } \
&\text { Expense } & \text { Depreciation }\
\text { A) } & \$ 48,000 & \$ 108,000 \
\text { B) } & \$ 48,000 & \$ 48,000 \
\text { C) } & \$ 60,000 & \$ 120,000 \
\text { D) } & \$ 35,200 & \$ 79,200
\end{array}$

Question

Quizplus · Accepted Answer

The correct answer is A. The depreciation expense for 2013 is $60,000 ($300,000 x 20%) and the accumulated depreciation is $60,000. The depreciation expense for 2014 is $48,000 ($240,000 x 20%) and the accumulated depreciation is $108,000 ($60,000 + $48,000).

On January 1, 2013, LaMonte Paint and Repair Purchased a Piece