Stine Company Purchased Machinery with a List Price of $96000

question 125

Multiple Choice

Stine Company purchased machinery with a list price of $96000.The company was given a 10% discount by the manufacturer.They paid $600 for shipping and sales tax of $4500.Stine estimates that the machinery will have a useful life of 10 years and a residual value of $30000.If Stine uses straight-line depreciation annual depreciation will be

• A)$6150.
• B)$6108.
• C)$9150.
• D)$5640.

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Definitions:

Operating Activities

Operating activities refer to the day-to-day functions involved in running a business, which are directly related to its primary activities and include generating revenue and paying expenses.

Depreciated Equipment

Equipment whose value has been reduced over time due to wear and tear or obsolescence, reflecting its reduced utility.

Bonds Payable

Long-term liabilities representing the amount a corporation or government is obligated to repay bondholders, including principal and interest.

Indirect Method

An accounting procedure used in cash flow statements to adjust net income for changes in non-cash items and cash operating expenses.