Wu Copy Shop Purchases a New Copy Machine in July

question 19

Multiple Choice

Wu Copy Shop purchases a new copy machine in July 2014 for $30,000. No other depreciable assets are placed in service in 2014. Since Wu Copy Shop expects to be in a much higher tax bracket in future years, it desires to minimize its current cost recovery amount to the fullest extent possible. What is the amount of Wu Copy Shop's ADS depreciation for 2014?

• A) $1,500
• B) $3,000
• C) $4,500
• D) $5,400
• E) $6,000

---

Definitions:

Accounts Receivable Period

The average amount of time that it takes for a company to receive payments owed by its customers.

Calendar Year

The period from January 1st to December 31st, used for financial and administrative purposes.

Factoring

A financial transaction where a business sells its accounts receivable to a third party at a discount to obtain immediate cash.

Accounts Receivables

Liabilities of customers towards a business for commodities or assistance that have been executed or utilized, waiting to be paid.