A Company Paid $500,000 to Purchase Equipment and $15,000 to Have

Multiple Choice

A company paid $500,000 to purchase equipment and $15,000 to have the equipment delivered to and installed in the company's production facilities.The equipment is expected to be used a total of 28,000 hours throughout its estimated useful life of six years.The estimated residual value of the equipment is $5,000.The company began using the equipment on May 1,2016.The company has an October 31,2016 year-end.It used the equipment for a total of 11,200 hours between May 1 and October 31,2016.Using the units-of- production method,what amount of depreciation expense would the company report in the income statement prepared for the year-ended October 31,2016?

A) $102,000
B) $198,000
C) $204,000
D) $206,000