Final answer:
The total depreciation for a crawler dozer tractor with an initial cost of $135,000 and a residual value of 35% over its useful life of 7,700 hours is $87,750.
Step-by-step explanation:
The student is asking how to compute the total amount of depreciation for a crawler dozer tractor over its useful life. The initial cost of the crawler dozer tractor is $135,000, and its residual value is 35% of the initial cost. The useful life of the tractor is estimated to be 7,700 hours.
To calculate the total depreciation, we will first determine the residual value in dollars by multiplying the initial cost by the residual percentage:
- Residual value = 135,000 × 0.35
- Residual value = $47,250
Next, we subtract the residual value from the initial cost to find the total amount to be depreciated:
- Total depreciation = Initial cost - Residual value
- Total depreciation = $135,000 - $47,250
- Total depreciation = $87,750
Therefore, the total amount of depreciation allowed for the tractor over its useful life is $87,750.