Tomko Company Purchased Machinery with a List Price of $32,000

question 134

Multiple Choice

Tomko Company purchased machinery with a list price of $32,000. They were given a 10% discount by the manufacturer. They paid $200 for shipping and sales tax of $1,500. Tomko estimates that the machinery will have a useful life of 10 years and a residual value of $10,000. If Tomko uses straight-line depreciation, annual depreciation will be

• A) $2,050.
• B) $2,036.
• C) $1,880.
• D) $3,050.

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Definitions:

Dissociation

The process or action by which a member of an entity such as a partnership or association formally ends their association with, or participation in, that entity.

Retiring Partner

A partner who leaves a partnership, ending their association with the business.

Discharged

In legal contexts, to release someone from an obligation, duty, or liability.

Existing Liabilities

Financial obligations or debts that a company or individual currently owes and is responsible for repaying.