Acme paid $120,000 for a machine with a $10,000 salvage value and an estimated life of 200,000 hours. Acme reports on a calendar year basis and used the machine for 1800 hours during the first year it owned the asset. Which of the following statements accurately compare the first year depreciation expense if the asset had been purchased on January 1 of the current year versus a March 1 acquisition date. (Round any intermediary calculations to the nearest cent and your final answer to the nearest dollar.)

Question

Quizplus · Accepted Answer

The depreciation expense is based on usage (hours), not the time of acquisition, so it remains the same at $990 for both acquisition dates.

Acme Paid $120,000 for a Machine with a $10,000 Salvage