A Machine with a Salvage Value of $4,000 and a Cost

question 114

Multiple Choice

A machine with a salvage value of $4,000 and a cost of $36,000 was purchased on January 1,2012.What is the depreciation expense for 2012 if the company uses straight-line depreciation for 10 years?

• A)$36,000
• B)$32,000
• C)$3,600
• D)$3,200

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Definitions:

Savings

Money set aside from current income for future use, often to accumulate wealth or for specific future expenditures.

Monetarism

A school of thought that emphasizes the role of governments in controlling the amount of money in circulation to influence the economy.

Proponent

An advocate or supporter of a particular idea, policy, or project.

Monetarism

An economic theory which argues that the management of the economy should be primarily based upon adjustments to the monetary supply, by governmental policies.