Use the Following Data for Questions 10 Through 17

question 9

Multiple Choice

Use the following data for questions 10 through 17. Each question is independent of the other questions.
Sawyer Corporation has a machine (Machine A) that it acquired on 1/1/14 for $540,000. On 12/31/14 such machines have a selling price and fair value of $621,000. When used in production, such machines have an estimated useful life of 10 years with no salvage value. Use the straight-line method.
Brown Corporation has a machine (Machine B) that it acquired on 1/1/14 for $729,000. On 12/31/14 such machines have a selling price and fair value of $540,000. When used in production, such machines have an estimated useful life of 10 years with no salvage value. Use the straight-line method.
On 12/31/14 Brown gave Machine B plus $81,000 cash to Sawyer in return for
Machine A.
-Jim Dolan and Matt Stine, maintenance repairmen, spent five days in unloading and setting up a new $30,000 precision machine in the plant. Their wages earned in this five-day period totaled $800.

• A) Asset(s) only.
• B) Accumulated amortization, depletion, or depreciation only.
• C) Expense only.
• D) Asset(s) and expense.

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Definitions:

Days

A unit of time equivalent to 24 hours, often used to measure durations or intervals.

Grow

To grow or expand in size, volume, or intensity as time progresses.

Annual Rate

The interest rate for a loan or investment over the span of one year.

Simple Interest

Interest calculated only on the principal amount, not on the interest accrued.