Vanderet's Computer Business Owns Computer Equipment Which Cost $3,240 and Has

question 189

Multiple Choice

Vanderet's Computer Business owns computer equipment which cost $3,240 and has an expected useful life of three years. No residual value is expected. At the company's yearend, December 31, the equipment's book value is $2,520. In what month was the computer purchased using the straight-line depreciation method?

• A) January
• B) March
• C) May
• D) June
• E) August

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Definitions:

Restricted

Assets or funds that are reserved for a specific purpose and cannot be freely used for other expenses or investments.

Stock Split

The division of a company's existing stock into multiple shares to boost the liquidity of the shares, though the market capitalization remains unchanged.

Marketability

The ease with which an asset can be bought or sold in the market without affecting its price.

Shareholders

Individuals or entities that own one or more shares of stock in a corporation, thereby having an ownership interest in the company.