A Long-Lived Asset Cost $24,000 and Is Estimated to Have

question 200

Multiple Choice

A long-lived asset cost $24,000 and is estimated to have a $3,000 residual value at the end of its 8-year useful life. The annual depreciation expense recorded for the third year using the double diminishing-balance method would be

• A) $2,010.
• B) $3,375.
• C) $2,953.
• D) $2,297.

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Definitions:

Cash Coverage Ratio

A fiscal indicator assessing a corporation's capability to fulfill its debt commitments using the cash flow generated from its operations.

Inventory Turnover

A ratio that measures how many times a company's inventory is sold and replaced over a certain period.

Cost of Goods Sold

Direct costs attributable to the production of the goods sold by a company, including material and labor costs.

Total Sales

The aggregate revenue a company generates from the sale of goods or services before any expenses are subtracted.