Laker Company Acquired a Machine for $33,000

question 49

Multiple Choice

Laker Company acquired a machine for $33,000. At the beginning of the current year the machine had accumulated depreciation of $12,000. Annual depreciation expense totaled $3,000. The book value of the machine at the end of the year equals:

• A) $24,000
• B) $33,000
• C) $18,000
• D) $21,000

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Definitions:

Mortgage Loan

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

Compounded Monthly

Interest calculation method where interests earned themselves earn interest, recalculated on a monthly basis.

Interest

The cost of borrowing money or the payment received for deposit funds, usually expressed as a percentage rate over a period of time.

Present Value

Today's equivalent monetary worth of future cash sums or flows, discounted at a specific rate of return.