Answer:
$2080
Explanation:
Given: Cost of generator= $11000.
Residual value= $1000.
Estimated life of generator= 5000 hours.
Actual activity performed during the period= 1040 hours.
Now, finding the depreciation expense for the first year using the units-of-activity method.
Formula; [tex]Depreciation\ expense= \frac{(cost- residual\ value)}{Total\ estimated\ life\ time\ activity} \times actual\ activity\ performed[/tex]
⇒ Depreciation expense= [tex]\frac{(11000-1000)}{5000} \times 1040[/tex]
Opening parenthesis
⇒ Depreciation expense= [tex]\frac{10000}{5000} \times 1040[/tex]
⇒ Depreciation expense= [tex]2 \times 1040 = \$ 2080[/tex]
Hence, the depreciation expense for the first year using the units-of-activity method of depreciation is $2080.
