A Factory Machine Was Purchased for $375,000 on January 1

question 177

Multiple Choice

A factory machine was purchased for $375,000 on January 1, 2021.It was estimated that it would have a $75,000 salvage value at the end of its 5-year useful life.It was also estimated that the machine would be run 40,000 hours in the five years.The company ran the machine for 4,000 actual hours in 2021.If the company uses the units-of-activity method of depreciation, the amount of depreciation expense for 2021 would be

• A)$37,500.
• B)$60,000.
• C)$75,000.
• D)$30,000.

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Definitions:

November and December Sales

Refers to the revenue generated from the sale of goods or services during the months of November and December, often a significant period for retailers due to holiday shopping.

Department Store

A large retail store offering a wide range of products and brands under one roof, organized into departments for shopper convenience.

Toy Manufacturer

A business involved in the design, production, and marketing of toys for children and sometimes adults.

Trucking Company

A business entity that specializes in transporting goods across distances using trucks.