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Acme Paid $100,000 for a Machine with a $5,000 Salvage

Question 96

Multiple Choice

Acme paid $100,000 for a machine with a $5,000 salvage value and an estimated life of 190,000 hours.
Acme reports on a calendar year basis and used the machine for 1,700 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.


A) Depreciation Expense if acquired January 1 is $850 and if acquired March 1 is $708.
B) Depreciation Expense if acquired January 1 is $850 and if acquired March 1 is $637.
C) In both cases,the Depreciation Expense is $850.
D) Depreciation Expense if acquired January 1 is $895 and if acquired March 1 is $746.

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