Partnership Income and Depreciation Concepts

The video tutorial covers various depreciation methods, including straight line, units of activity, and declining balance. It explains how to calculate depreciation expenses for different years and scenarios. Additionally, the video discusses the division of net income in a partnership, detailing how to allocate salaries, interest, and remaining income or deficiency between partners.

What was the purchase cost of the new machine by Lincoln Company?

• $100,000

• $200,000

• $150,000

• $250,000

What is the salvage value of the machine?

• $20,000

• $15,000

• $12,000

• $10,000

How many working hours is the machine expected to be used during its life?

• 12,000 hours

• 10,000 hours

• 8,000 hours

• 5,000 hours

What is the expected life of the machine in years?

• 3 years

• 5 years

• 6 years

• 4 years

In the straight-line method, what is the annual depreciation expense for the machine?

• $32,500

• $30,000

• $27,600

• $25,000

How does the straight-line method treat depreciation over the years?

• It decreases each year

• It fluctuates randomly

• It increases each year

• It remains constant

What is the depreciation expense for 2019 using the units of activity method?

• $28,500

• $26,000

• $24,840

• $22,000

In the units of activity method, what is the depreciable cost per hour?

• $13.80

• $15.00

• $12.50

• $16.20

How does the units of activity method calculate depreciation?

• Based on the number of years

• Based on the number of working hours

• Based on the cost of the machine

• Based on the salvage value

What is the depreciation expense for 2019 using the declining balance method?

• $60,000

• $55,000

• $65,000

• $50,000