On January 1,2017,Busy Beaver bought a new industrial lathe for $210,000.It expects to use the lathe for 10,000 hours over the next 5 years and then sell it for $10,000.Busy Beaver used the lathe for 2,000 hours in 2017 and 2,500 hours in 2018.Accumulated Depreciation at December 31,2018,using units-of-production,equals:
A)$50,000.
B)$120,000.
C)$90,000.
D)$80,000.

Question

Quizplus · Accepted Answer

Depreciation expense = (Cost − Residual value)× (Actual production this period ÷ Estimated total production)
= ($210,000 − $10,000)× [(2,000 units + 2,500 units)÷ 10,000 units] = $90,000

On January 1,2017,Busy Beaver Bought a New Industrial Lathe for $210,000.It