The Haznot Company acquired a machine for a net cost of $21,600 in September of the current year. It is expected to have no salvage value after 5 years of intensive use. Under the
Sum-of-the-Years'-Digits method, the depreciation recorded in year two would be $6,720.

Question

Quizplus · Accepted Answer

The Sum-of-the-Years'-Digits method allocates more depreciation expense to the earlier years of an asset's life. In this case, the depreciation expense in year two would be $6,720, which is correct.

The Haznot Company Acquired a Machine for a Net Cost