Use the Following Information for Questions

question 36

Multiple Choice

Use the following information for questions.
Simpson Company applies revaluation accounting to plant assets with a carrying value of $800,000, a useful life of 4 years, and no salvage value.Depreciation is calculated on the straight-line basis.At the end of year 1, independent appraisers determine that the asset has a fair value of $750,000.
-The entry to record depreciation for this same asset in year two will include a

• A)debit to Accumulated Depreciation for $200,000.
• B)debit to Depreciation Expense for $250,000.
• C)credit to Accumulated Depreciation for $150,000.
• D)debit to Depreciation Expense for $200,000.

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Definitions:

Compounded Monthly

Interest calculation method where the interest is added to the principal balance monthly, leading to compound growth.

Compounded Monthly

Interest on an investment or loan is calculated and compounded every month.

Maximize Benefits

The act of optimizing or getting the most advantageous results from a certain situation or set of resources.

Compounded Annually

Interest that is computed once per year and added to the account's total.