On October 1, 2021, Holt Company Places a New Asset

question 158

Multiple Choice

On October 1, 2021, Holt Company places a new asset into service.The cost of the asset is $120,000 with an estimated 5-year life and $30,000 salvage value at the end of its useful life.What is the book value of the plant asset on the December 31, 2021, balance sheet assuming that Holt Company uses the double-declining-balance method of depreciation?

• A)$78,000
• B)$90,000
• C)$108,000
• D)$114,000

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Definitions:

Outside Supplier

A third-party company that provides goods or services to another company, as opposed to the company producing these items in-house.

Purchase Subcomponent

The act of buying parts or elements that will be used to assemble a final product.

Segment Margin

The amount of profit or loss generated by a particular segment of a business, considering only the revenues and expenses directly attributable to that segment.

Financial Advantage

The benefit gained in financial terms that puts an individual, company, or country in a better position compared to others.