1. On April 30, 2009, Tilton Products purchased machinery for $88,000. The useful life of this machinery is estimated at 8 years, with an $8,000 residual value. Refer to the information above. Assume that in its financial statements, Tilton Products uses straight line depreciation and the half year convention. Depreciation expense recognized on this machinery in 2009 and 2010 will be:
A) $5,000 in 2009 and $10,000 in 2010.
B) $5,500 in 2009 and $11,000 in 2010
C) $6,000 in 2009 and $12,000 in 2010.
D) $7,500 in 2009 and $11,000 in 2010.
2. On April 30, 2009, Tilton Products purchased machinery for $88,000. The useful life of this machinery is estimated at 8 years, with an $8,000 residual value. Refer to the information above. Assume that in its financial statements, Tilton Products uses straight line depreciation and the half year convention.Refer to the information above. Assume that in its financial statements, Tilton Products uses straight line depreciation and rounds depreciation for fractional years to the nearest month. Depreciation expense recognized on this machinery in 2009 and 2010 will be:
A) $5,833 in 2009 and $10,000 in 2010.
B) $6,667 in 2009 and $10,000 in 2010.
C) $10,000 in 2009 and $10,000 in 2010.
D) $2,333 in 2009 and $7,000 in 2010.