On January 1, 2014, Rugh Company purchased equipment with a list price of $12,000 with a 2% cash discount. The equipment was delivered under terms of FOB destination and freight costs amounted to $400. A total of $1,000 was paid for installation and testing. During the first year, Rugh paid $300 for insurance on the equipment and another $250 for routine maintenance and repairs. Rugh uses the units-of-production method of depreciation. Useful life is estimated at 5 years or 300,000 units and estimated salvage value is $2,000. During 2014, the equipment produced 60,000 units. What is the amount of depreciation for 2014?

Question 2 options:

1) $2,152
2) $2,352
3) $2,552
4) $2,632

Answer rating: 100% (QA)

A B D E 1 Particulars Amount 2 List price 12000 3 Less Cash discount 2 240 4 Net ... View the full answer