On January 1, 2008, Grayson Company Purchased for $240,000 a Machine

question 48

Multiple Choice

On January 1, 2008, Grayson Company purchased for $240,000 a machine with a useful life of ten years and no salvage value. The machine was depreciated by the double-declining-balance method, and the carrying amount of the machine was $153,600 on December 31, 2009. Grayson changed to the straight-line method on January 1, 2010. Grayson can justify the change. What should be the depreciation expense on this machine for the year ended December 31, 2011?

• A) $15,360
• B) $19,200
• C) $24,000
• D) $30,720

Identify the conditions for profit maximization in perfect competition.

Understand the relationship between price, marginal cost, and average total cost in determining firm efficiency.

Recognize the role of economic profits and losses in a perfect competitive market structure.

Comprehend the significance of standardized products in perfect competition.

---

Definitions:

Capital Structure Weight

Capital structure weight refers to the proportion of each type of capital (debt, equity, etc.) in the total capital of a company, often used in calculating the weighted average cost of capital (WACC).

Convertible Bonds

A type of bond that can be converted into a predetermined number of shares of the issuing company's stock at certain times during the bond's life, usually at the discretion of the bondholder.

Shares Outstanding

The total number of shares that are owned by shareholders, including both public investors and restricted insider shares, of a company.

Exercise of Warrants

The act of utilizing warrants to purchase the company's stock at a predetermined price before the warrant expires.