On January 1, 2019, Bithe Smarney & Co

question 30

Multiple Choice

On January 1, 2019, Bithe Smarney & Co. purchased $35,500 worth of office equipment with an estimated useful life of seven years and an estimated residual value of $4,000. Bithe Smarney uses the straight-line method of amortization for all office equipment. At the beginning of 2022, Bithe Smarney revised its estimate of the useful life of the office equipment to a total of nine years. The 2022 amortization expense is:

• A)$2,000.
• B)$3,667.
• C)$2,444.
• D)$3,000.

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Definitions:

Recession

An interval of economic deceleration, involving a fall in business and industrial activities, often recognized by a drop in GDP across two sequential quarters.

Sharp Recession

A severe and rapid downturn in economic activity.

Unemployment Rate

The fraction of the total employment market that remains without work but is eagerly searching for jobs and is willing to be employed.

Severe Recessions

Extended periods of economic decline around the world characterized by significant reductions in economic activity, high unemployment, and often deflation.