Wexford Co

question 134

Multiple Choice

Wexford Co.purchased a new delivery truck at the beginning of 2016.The truck has a cost of $37,000, an estimated life of 5 years, and an estimated residual value of $7,000.A full year's depreciation expense is to be recorded in 2016.The truck was driven 20,000 miles during 2016 and 24,000 miles during 2017.The number of expected miles over five years is 100,000.
​
-Refer to information for Wexford Co. ​
Wexford's is comparing the straight-line and double-declining-balance depreciation methods.Of these two methods, which method creates the larger expense and larger tax savings in 2016?

• A) Straight-line depreciation creates the larger expense, while double-declining-balance depreciation creates the larger tax savings.
• B) Straight-line depreciation creates both the larger expense and the larger tax savings.
• C) Double-declining-balance depreciation creates both the larger expense and the larger tax savings.
• D) Double-declining-balance depreciation creates the larger expense, while straight-line depreciation creates the larger tax savings.

---

Definitions:

Metabolic Tolerance

An adaptive process where increased metabolic activity reduces the effective concentration of a substance, such as a drug, requiring higher doses to achieve the same effect.

Synaptic Fatigue

A temporary decrease in synaptic efficacy after sustained activity, often resulting from the depletion of neurotransmitter supplies.

Cellular Tolerance

Cellular tolerance is a physiological adaptation where increased exposure to a substance, like a drug, leads to a decrease in the substance's effect on cells or tissues.

Intoxicated

The condition of having physical and mental faculties impaired by an excess of alcoholic drink or any substance, leading to altered mood, behavior, and coordination.