A company paid $515,000 to purchase equipment. Commercial use of the equipment began on July 1, year1. The estimated residual value of the equipment is $5,000. The equipment is expected to be used a total of 50,000 hours throughout its estimated useful life of six years. The company has a December 31 year-end and had used the equipment a total of 11,200 hours prior to the year-end.
Using the units of production method, what amount of depreciation expense would the company report for this equipment in the income statement prepared for the year ended December 31, Year1?
Do not round interim computations and choose the closest answer to your final answer.
a. $57,680 b. $114,240 c. $115,360 d. $57,120