Rotan Company purchased a van on January 1, 2018, for $810,000. Estimated life of the van was five years, and its estimated residual value was $98,000. Rotan uses the straight-line method of depreciation. At the beginning of 2020, the company revised the total estimated life of the asset from five years to six years. The estimated residual value remained the same as estimated earlier. Calculate the depreciation expense for 2020.
A) $142,400
B) $131,300
C) $106,800
D) $71,200
C) $106,800
Explanation: Depreciation per year = (Cost - Residual value) / Useful life
Depreciation per year = ($810,000 - $98,000) / 5 = $142,400
Depreciation provided in the books = $142,400 × 2 years = $284,800
Revised depreciation for the year 2020 = ($810,000 - $284,800 - $98,000) / 4 years = $106,800
You might also like to view...
The work sheet is used as an aid in preparing
a. adjusting entries; b. financial statements; c. closing entries; d. adjusted trial balances; e. all of these.
Identify the following group of words: A diversity workshop will be offered on May 15, you can find a description of this training opportunity on our intranet
A) correctly punctuated sentence B) fragment C) comma splice D) run-on sentence
What are the different types of discrimination that occur at the workplace? Briefly describe each type of discrimination.
What will be an ideal response?
When establishing a mission, a company needs to take into consideration all of the following
a. distinctive competence b. economy c. firm’s history d. business environment