Use the Following Information for Questions

question 12

Multiple Choice

Use the following information for questions
On January 1, 2015, Sundry Corp.purchased equipment for $55,000.It was expected to last 8 years, after which it will be sold for $3,000.It is expected to be used for a total of 8,000 machine hours, and was used for 900 hours during the year ended December 31, 2015.
-The depreciation expense for 2015 using the straight-line method will be

• A)$5,850.
• B)$6,500.
• C)$6,875.
• D)$7,250.

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Definitions:

Consumer Surplus

The difference between the maximum price a consumer is willing to pay for a good or service and the actual price they do pay.

Tax

A mandatory monetary contribution or different sort of tax levied on a taxpayer by a government entity to finance government expenditure and assorted public costs.

Deadweight Loss

The loss of economic efficiency that can occur when the equilibrium for a good or service is not achieved or is distorted.

Equilibrium

An economic situation in which no individual would be better off doing something different.