Rogers Company Purchased a Tooling Machine on January 3, 2008

question 32

Multiple Choice

Rogers Company purchased a tooling machine on January 3, 2008 for $700,000. The machine was being depreciated on the straight-line method over an estimated useful life of 10 years, with no salvage value. At the beginning of 2015, the company paid $175,000 to overhaul the machine. As a result of this improvement, the company estimated that the useful life of the machine would be extended an additional 5 years (15 years total) . What should be the depreciation expense recorded for the machine in 2015?

• A) $48,125
• B) $58,333
• C) $70,000
• D) $77,000

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Definitions:

Liability

Legal responsibility for one's actions or omissions, which can result in an obligation to compensate for any resulting damages or losses.

Debt

an obligation, typically financial, owed by one party to another.

Retires

The act of leaving one's job and ceasing to work, typically due to reaching a certain age or for health reasons.

Liability on Debts

The legal responsibility to pay money owed to creditors, either by an individual or a company.