Compute what is the depreciation expense

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Question 1: In-The-Trenches Pty Ltd uses the Units-Of-Production method to depreciate assets. They bought Equipment for a cost of $200 000 on 1 July, 2014 with a 5 year life. The asset has an estimated residual value of $50 000 and a useful life of 25 000 hours. If the Equipment is used for 7 000 hours in year 1, what is the depreciation expense.

Option (a) $40 000

Option (b) $30 000

Option (c) $42 000

Option (d) $50 000

Option (e) $56 000

Reference no: EM132543497

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