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Homework answers / question archive / Equipment acquired at the beginning of the year at a cost of $180,000 has an estimated residual value of $10,000, has an estimated useful life of 40,000 hours, and was operated 3,600 hours during the year
Equipment acquired at the beginning of the year at a cost of $180,000 has an estimated residual value of $10,000, has an estimated useful life of 40,000 hours, and was operated 3,600 hours during the year. Determine
(b) the depreciation rate,
Computation of Depreciation Rate:
Depreciable Cost = Cost of Equipment - Residual Value
= $180,000-$10,000
= $170,000
Depreciation Rate = Depreciable Cost/Estimated Useful Life of Hours
= $170,000/40,000 hours
= $4.25 per hour