On July 1, Hartman Construction purchases a bulldozer for $205,200. The equipment has a 9- year life with a residual value of $14,400. Hart ford uses the units-of-activity method of depreciation, and the bulldozer is expected to yield 26,500 operating hours. What is the depreciation expense per hour of operation? O $7.74 O $7.20 O $8.29
On July 1, Hartman Construction purchases a bulldozer for $205,200. The equipment has a 9- year life with a residual value of $14,400. Hart ford uses the units-of-activity method of depreciation, and the bulldozer is expected to yield 26,500 operating hours. What is the depreciation expense per hour of operation? O $7.74 O $7.20 O $8.29
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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Transcribed Image Text:On July 1, Hartman Construction purchases a bulldozer for $205,200. The equipment has a 9-
year life with a residual value of $14,400. Hart ford uses the units-of-activity method of
depreciation, and the bulldozer is expected to yield 26,500 operating hours. What is the
depreciation expense per hour of operation?
O $7.74
O $7.20
O $8.29
O $1.40
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