The Roger Company Leased a Machine at the Beginning of 2016

question 70

Multiple Choice

The Roger Company leased a machine at the beginning of 2016. The machine was properly capitalized by Roger at $73,735. A lease payment of $16,563 is due at the end of each year. The expected life of the machine is seven years, and the term of the lease is five years. At the beginning of 2021, the machine will be returned to the lessor. Both Roger and the lessor use the straight-line method of depreciation. What amount of depreciation expense should
Roger record in 2016 for the machine round calculations up to the nearest dollar) ?

• A) $14,600
• B) $14,747
• C) $16,563
• D) $17,000

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Definitions:

France

A country in Western Europe known for its history, culture, and significant influence in art, science, and politics.

U.S.

The United States of America, a country in North America composed of 50 states, a federal district, five major self-governing territories, and various possessions.

Collective bargaining

The process in which employers and unions negotiate terms of employment, including wages, hours, and working conditions, for a group of employees.

Company level

Refers to operations, decisions, or policies occurring or being implemented at the specific level of an individual company or organization.