ABC Inc Purchased Machinery in the Amount of $50,000 on January

question 47

Multiple Choice

ABC Inc. purchased Machinery in the amount of $50,000 on January 1^st, 2013. The machinery is estimated to have a 5-year useful life with no salvage value. The machinery qualifies for a 20% government subsidy. As a result, ABC Inc. received a government subsidy of $10,000 toward the purchase of the equipment. What is the effect of this subsidy on the company's 2013 Statement of Earnings/Comprehensive Income?

• A) A $2,000 increase to the amortization expense for 2013.
• B) A $2,000 decrease to the amortization expense for 2013.
• C) A $5,000 decrease to the amortization expense for 2013.
• D) A $5,000 increase to the amortization expense for 2013.

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Definitions:

Teacher Expectations

The beliefs or perceptions teachers hold about the abilities of their students, which can significantly influence student performance.

Parent Expectations

Parent expectations refer to the hopes, desires, and demands that parents have for their children's behavior, achievements, and overall development.

Middle Childhood

A developmental stage that typically includes children from about 6 to 12 years old, characterized by notable growth in cognitive and social abilities.

National Economy

The system of economic activities and the total wealth produced within a nation, including the production, consumption, and distribution of goods and services.