Use the Following Information for Questions

question 8

Multiple Choice

Use the following information for questions:
Maddie Co.purchased a machine on January 1, 2011 for $22,500.The machine had an estimated useful life of 10 years and an estimated residual value of $2,500.The company uses double-declining-balance amortization.
-If Maddie Co.used the straightline method of amortization what would the carrying value of the machine be at the end of 2011?

• A)$20,500
• B)$20,250
• C)$18,250
• D)$18,000

---

Definitions:

Commercial Paper

An unsecured, short-term debt instrument issued by corporations, typically used for the financing of payroll, accounts payable, and inventories.

Treasury Note

Debt obligation of the federal government with original maturity between 1 and 10 years.

Dow Jones Industrial Average (DJIA)

An index that shows how 30 large, publicly-owned companies based in the United States have traded during a standard trading session in the stock market.

Dollar Price

The cost or value of a financial instrument or commodity expressed in terms of US dollars.