Equipment with a Cost of $160,000, an Estimated Residual Value

question 80

Multiple Choice

Equipment with a cost of $160,000, an estimated residual value of $10,000, and an estimated life of 4 years, was purchased on April 1, 2018. If the straight-line method is used, the depreciation expense for calendar 2018 is

• A) $40,000.
• B) $37,500.
• C) $30,000.
• D) $28,125.

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Definitions:

FICA Taxes

Taxes funded by both employers and employees to finance Social Security and Medicare benefits, based on earned income.

Term Life Insurance

A type of life insurance policy that provides coverage for a specified period ('term'), offering a death benefit if the insurer dies during that term.

Premium

The amount paid for an insurance policy, often on a monthly, quarterly, or annual basis.

Beneficiaries

Individuals or entities entitled to receive benefits or proceeds from an insurance policy, will, or trust.