On July 1, 2022, a Machine with a Useful Life

question 149

Multiple Choice

On July 1, 2022, a machine with a useful life of five years and a residual value of $4,000 was purchased for $20,000.Under straight-line depreciation, what is the depreciation expense for calendar 2023?

• A)$4,000
• B)$3,556
• C)$3,200
• D)$1,600

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Definitions:

LLC

A Limited Liability Company is a type of business organization that merges the benefit of pass-through taxation seen in partnerships or sole proprietorships with the advantage of limited liability found in corporations.

Capital Injection

A capital injection is the infusion of funds into a business by its owners or external parties, often to shore up its financial health or expand operations.

Bankruptcy

A legal process for individuals or businesses that are unable to repay their outstanding debts, allowing them to eliminate or repay some or all of their debts under the protection of the bankruptcy court.

Credit

Credit refers to the trust which allows one party to provide money or resources to another party wherein the second party does not reimburse the first party immediately but promises either to repay or return those resources (or other materials of equal value) at a later date.