Ironworks Industries paid $190,000 for a machine with a $8,000 salvage value and an estimated life of 200,000 hours. Ironworks reports on a calendar year basis and used the machine for 2,100 hours during the first year it owned the asset. Which of the following statements accurately compare the first year depreciation expense if the asset had been purchased on January 1 of the current year versus a March 1 acquisition date. (Round any intermediary calculations to the nearest cent and your final answer to the nearest dollar.)

Question

Jonathan Henry

Business

10 April, 15:44

Ironworks Industries paid $190,000 for a machine with a $8,000 salvage value and an estimated life of 200,000 hours. Ironworks reports on a calendar year basis and used the machine for 2,100 hours during the first year it owned the asset. Which of the following statements accurately compare the first year depreciation expense if the asset had been purchased on January 1 of the current year versus a March 1 acquisition date. (Round any intermediary calculations to the nearest cent and your final answer to the nearest dollar.)

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Kamryn Dillon · Answer 1

Answer: If the asset had been purchased on January 1 of the current year versus a March 1 acquisition date. the depreciation expense would have been higher for the year as the machine would have been used for 12 months (more hours) instead of 10 months.