Reference no: EM132483962

Question 1 - A fixed asset with a 10-year life and no salvage value is purchased. Estimated output is 10,000 units. Actual units produced in its first 8 years are 9,200 units. Which depreciation method will result in the highest book value at the end of the eighth year?

a. Straight-line

b. Double-declining balance

c. Units of production

d. Sum-of-the-years'-digits

Question 2 - On January 1, 2010, Bart Company purchased equipment at a cost of $105,000. The equipment was estimated to have a useful life of 5 years and a salvage value of $15,000. Bart uses the sum-of-the-years'-digits method of depreciation. What should the accumulated depreciation be on December 31, 2013?

a. $98,000

b. $84,000

c. $72,000

d. $54,000

e. $99,000

Question 3 - Wheeler Corporation constructed a building at a cost of $20,000,000. The weighted-average accumulated expenditures were $8,000,000, actual interest was $1,200,000, and avoidable interest was $800,000. If the salvage value is $1,200,000, and the useful life is 40 years, depreciation expense for the first full year using the straight-line method is:

a. $475,000

b. $490,000

c. $500,000

d. $520,000

e. $670,000