Equipment with a cost of $390,000 and estimated residual value of $60,000 is expected to have a useful life of 30,000 hours. during may, the equipment was operated 700 hours. what amount should be recorded as depreciation expense for the month? multiple choice

o $8,400.

o $7,700.

o $7,700.

o $9,100.

o $7,000.

depreciation expense for the month  = $7700

so correct option is c. $7,700

Explanation:

given data

cost = $390,000

residual value = $60,000

useful life = 30,000 hours

equipment  operated = 700 hours

to find out

amount should be recorded as depreciation expense for the month

solution

we get here first Annual depreciation expense that is express here as

Annual depreciation expense = ( Cost - Residual value ) ÷ Useful Life    ..................1

put here value we get

Annual depreciation expense =

Annual depreciation expense = $11 per hour

so

depreciation expense for the month will be

depreciation expense for the month =  Annual depreciation expense × equipment  operated    .....................2

depreciation expense for the month  = $11 × 700

depreciation expense for the month  = $7700

so correct option is c. $7,700

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