Fields Company purchased equipment on January 1 for $180,000. This system has a useful life of 8 years and a salvage value of $20,000. The company estimates that the equipment will produce 40,000 units over its 8-year useful life. Actual units produced are: Year 1 – 4,000 units; Year 2 – 6,000 units; Year 3 – 8,000 units; Year 4 – 5,000 units; Year 5 – 4,000 units; Year 6 – 5,000 units; Year 7 – 7,000 units; Year 8 – 3,000 units. What would be the depreciation expense for the second year of its useful life using the units-of-production method?

Select one:

A. $16,000.

B. $24,000.

C. $45,000.

D. $33,750.

E. $20,000.

Answer rating: 100% (QA)

The unit of production method is a method of calculating depreciation of the value of an as... View the full answer