Newman CoPurchased CNC Router Cutting and Engraving Machinery at a Cost

question 41

Multiple Choice

Newman Co.purchased CNC router cutting and engraving machinery at a cost of $320,000 in January 2019.The company's estimated useful life of this high tech equipment is 5 years, and the estimated salvage value is $48,000. Using the straight-line method, the depreciation expense to be recognized for 2019, the first year of the machinery's life, would be:

• A)$54,400.
• B)$64,000.
• C)$73,600.
• D)$128,000.

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Definitions:

Inferior Good

A type of good for which demand decreases as the income of the individual increases, inversely related to income.

Normal Good

A good for which demand increases as the income of the consumer increases, reflecting a direct relationship between income and demand.

Income Increases

A rise in the amount of money earned by individuals or households, often measured on an annual basis.

Supply of Cornflakes

Refers to the total quantity of cornflakes that producers are willing to sell at a given price over a specific period.