A Machine Was Purchased on January 1 for $100,000

question 64

Multiple Choice

A machine was purchased on January 1 for $100,000. The machine has an estimated useful life of 5 years with a salvage value of $20,000. Under the straight-line method, the book value and the accumulated depreciation of the machine at the end of year two is respectively,

• A)$60,000 and $40,000
• B)$68,000 and $32,000
• C)$40,000 and $60,000
• D)$48,000 and $32,000

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Definitions:

Creativity

The ability to produce original and unusual ideas, or to make something new or imaginative.

Novel Ideas

New, original, and innovative concepts or thoughts that have not been previously considered or explored.

Ability

The possession of the means or skill to do something.

Intersection

In mathematics and set theory, the set of elements that are common to two or more sets.