ACCT
ACCTSol69.pdf

# ACCTSol69.pdf - 3 Award 1.00 point A copy machine cost...

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3. Award: 1.00 point A copy machine cost \$95,000 and has an estimated residual value of \$5,000. It is expected to last about ten years and to make a total of 3,000,000 copies. 200,000 copies are made in Year 1, 300,000 in Year 2, and 450,000 in Year 3. Units-of-Activity depreciation is used. What is the balance in the Accumulated Depreciation account at the end of Year 3? \$27,000 \$30,400 \$18,000 \$28,500 None of the other alternatives are correct The Accumulated Depreciation of a capital asset is the total of all depreciation charges to date. At the end of three years the Accumulated Depreciation account balance will be the total depreciation charges for the first three years. Under the units of activity method, the depreciable base [cost - residual] will be spread over the expected production or output of the capital asset. In this case, the copier is expected to make 3 million copies so each is expected to cost 3 cents. The depreciation expense in each year is this per unit cost times the number of copies made.

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