On January 1, a Machine with a Useful Life of Five

question 131

Multiple Choice

On January 1, a machine with a useful life of five years and a residual value of $50,000 was purchased for $150,000. What is the depreciation expense for year 2 under the double-declining-balance method of depreciation?

• A) $36,000
• B) $60,000
• C) $48,000
• D) $28,800

---

Definitions:

Investing Activity

Financial actions related to acquiring or disposing of non-current assets or investments, contributing to the long-term operations and growth of a company.

Operating Activities

Activities that are directly tied to the production and delivery of goods and services, representing the primary revenue-generating activities of an entity.

Cash Equivalents

Short-term, highly liquid investments that are readily convertible to known amounts of cash and so close to their maturity that they present insignificant risk of changes in value.