A Company Purchased a Machine for $970,000

question 148

Multiple Choice

A company purchased a machine for $970,000.The machine has a useful life of 12 years and a residual value of $4,500.It is estimated that the machine could produce 1,000,000 units over its useful life.In the first year,200,000 units were produced.In the second year,production increased to 300,000 units.Using the units-of-production method,what is the book value of this asset at the end of the second year of operations?

• A)$482,750
• B)$487,250
• C)$485,000
• D)$291,000
• E)$289,650