Paul Bought a Computer for $15,000 for Business Use on March

question 56

Multiple Choice

Paul bought a computer for $15,000 for business use on March 18,2014.This was his only purchase for that year.Paul used the most accelerated depreciation method available,but did not elect Sec.179.Bonus depreciation was not available.Paul sells the machine in 2016.The depreciation on the computer for 2015 is

• A)$0.
• B)$1,440.
• C)$1,500.
• D)$2,880.

Grasp the equity method and fair value method of accounting for investments.

Know how to account for investment transactions, including purchases, dividends, and sales.

Understand the preparation and purpose of consolidated financial statements.

Recognize the impact of ownership percentages on accounting methods.

---

Definitions:

Machine Hour

A measure of production time, indicating the hours a machine is in operation.

Activity-Based Costing

A costing methodology that assigns overhead and indirect costs to related products and services based on the activities they require.

Overhead Cost

The ongoing expenses of operating a business that are not directly tied to the production of goods or services, such as rent and utilities.

Product Line

A group of related products under a single brand sold by the same company.