During Year 3, Stratton Inc

question 112

Multiple Choice

During Year 3, Stratton Inc. decided to change the useful life and residual value on equipment costing $400,000, based on new information about the equipment's operating capacity and market value. The equipment was purchased January 1, Year 2. The original estimated useful life and residual value were 10 years and $40,000 respectively; the new estimates are 8 years total useful life rather than 10 years, and $20,000 residual value. What is depreciation expense for the year ended December 31, Year 3 (rounded to the nearest dollar) ?

• A) $49,143
• B) $43,000
• C) $47,344
• D) $54,286

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Definitions:

Transaction Selling

Transaction Selling focuses on immediate sales without necessarily building long-term customer relationships, prioritizing quick deals and exchanges.

Partnering/Consultative Selling

A sales approach that focuses on building long-term relationships by providing value and advice, rather than just selling products.

Cognitive Dissonance

A psychological phenomenon where an individual experiences mental discomfort or stress from holding two or more conflicting beliefs, values, or attitudes.

Customer Retention

The practice of engaging existing customers to continue buying products or services from a business.