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Hot Wort Ltd

question 98

Multiple Choice

Hot Wort Ltd. purchased equipment on April 1, 2020, for $140,000. The residual value is $20,000 and the estimated life is 6 years or 55,000 hours. Compute depreciation expense for the year ending December 31, 2020 if Hot Wort Ltd. uses the straight-line method of depreciation.


Definitions:

Satisfaction of Debt

Satisfaction of Debt is the fulfillment of a financial obligation, such as the repayment of a loan, thereby releasing the debtor from further liability.

Owner's Rights

Legal rights conferred to owners, entitling them to use, enjoy, and dispose of their property as they see fit.

Strict Foreclosure

A legal process by which the secured lender obtains the title to the mortgaged property without the sale thereof, when the borrower fails to meet the obligations.

Deficiency

The difference between the amount owed on a loan and the amount recovered from selling the asset securing the loan if the latter is less.

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