Question

Depreciation by Units-of-activity Method A diesel-powered tractor with a cost of $259,000 and an estimated residual value of $7,400 is expected to have a useful operating life of 85,000 hours. During April, the tractor was operated 200 hours. Determine the depreciation for the month. If required, carry out any division to two decimal places.

Answer 1

the depreciation expense is $592

Step-by-step explanation:

The computation of the depreciation expense is shown below:

= (cost - residual value) ÷ useful operating life × operated in april month

= ($259,000 - $7,400) ÷ 85,000 hours × 200 hours

= $592

Hence, the depreciation expense is $592

The same should be considered and relevant too