An Asset Was Purchased on January 1, 2012 at a Cost

question 156

Multiple Choice

An asset was purchased on January 1, 2012 at a cost of $50,000 . It has a residual value of $10,000 and it has a life of 5 years. Its fourth year of depreciation expense under the double-declining-balance method will be:

• A) $7,200.
• B) $4,320.
• C) $800.
• D) $0.
• E) $1,000.

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Definitions:

Respondeat Superior

A legal doctrine that holds an employer or principal legally responsible for the wrongful acts of an employee or agent, performed within the scope of employment or agency.

Principal

The main individual or group participating in an agreement or deal, or the initial sum of money put in or borrowed, prior to adding interest.

Agent's Torts

Refers to wrongful acts committed by an agent that result in legal liability for the principal under certain conditions.

Vicarious Liability

Legal responsibility assigned to one party for the actions of another, typically in employer-employee relationships.