A Machine Was Purchased for $180,000 and It Was Estimated

question 204

Multiple Choice

A machine was purchased for $180,000 and it was estimated to have a $12,000 salvage value at the end of its useful life.Monthly depreciation expense of $1,750 was recorded using the straight-line method.The annual depreciation rate is

• A)15.0%.
• B)2.5%.
• C)10.0%.
• D)12.5%.

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Definitions:

Title

Legal term referring to the formal right of ownership of property, including the evidence or documents that prove ownership.

Short Sale

The sale of a security that the seller does not own at the time of sale, typically executed in the anticipation of a decline in the security's price.

Mortgage Loan

A loan secured by the collateral of specified real estate property that the borrower is obliged to pay back with a predetermined set of payments.

Property

Legal rights over resources such as land, objects, intellectual creations, and more, recognized by law.