The Giovanni Company Purchased a Tooling Machine in 2002 for $120,000

question 122

Multiple Choice

The Giovanni Company purchased a tooling machine in 2002 for $120,000. The machine was being depreciated by the straight-line method over an estimated useful life of 20 years, with no salvage value. At the beginning of 2012, after 10 years of use, Giovanni paid $20,000 to overhaul the machine. Because of this improvement, the machine's estimated useful life would be extended an additional 5 years. What would be the depreciation expense recorded for the above machine in 2012?

• A) $4,000
• B) $5,333
• C) $6,000
• D) $7,333

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