Newman CoPurchased CNC Router Cutting and Engraving Machinery at a Cost

question 2

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 declining-balance depreciation at twice the straight-line rate, the depreciation expense to be recognized for 2020, the second year of the machinery's life, would be:

• A)$43,520.
• B)$51,200.
• C)$76,800.
• D)$84,480.

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Definitions:

Sales Revenues Section

This section of an income statement accounts for the total income generated by the sale of goods or services before any costs or expenses are deducted.

Sales Discounts

Reductions to the selling price of goods or services that encourage customers to pay promptly.

Sales Returns and Allowances

Deductions from a company's sales revenue for returned merchandise or allowances given for damaged goods.

Credit Terms

Conditions under which credit is extended by a seller to a buyer, detailing the time period for payment and any discounts for early payment.