Use the Following Information for Questions

question 49

Multiple Choice

Use the following information for questions.
Swift Company purchased a machine on January 1, 2009, for $300,000.At the date of acquisition, the machine had an estimated useful life of six years with no residual value.The machine is being depreciated on a straight-line basis.On January 1, 2012, Swift determined, as a result of additional information, that the machine had an estimated useful life of eight years from the date of acquisition with no residual value.An accounting change was made in 2012 to reflect this additional information.
-Brittany Company purchased a computer system for £94,250 on January 1, 2011.it was depreciated based on a 7-year life and an £19,000 residual value.On January 1,2013,Brittany revised these estimates to a total useful life of 4 years and a residual value of £10,000.Brittany's entry to record 2013 depreciation expense will inclide debit to Depreciation Expense for:

• A)£75,250
• B)£72,750
• C)£19,000
• D)£31,375

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Definitions:

Financing

The process of providing funds for business activities, making purchases, or investing.

Venture Capitalist

An investor who provides capital to startup ventures or supports small companies that wish to expand but do not have access to equities markets.

Demoted

The act of reducing someone's rank, status, or position as a punitive measure or due to organizational restructuring.

Convertible Debt

A form of short-term borrowing that can be turned into equity, typically a predetermined number of shares, either upon future financing or at the discretion of the investor.