Refer to Fabian Woodworks

question 180

Multiple Choice

Refer to Fabian Woodworks. Based on the information presented above, what method of depreciation will maximize depreciation expense in 2012?

• A)straight-line
• B)double-declining-balance
• C)units-of-production
• D)All methods produce the same expense in 2012.

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Definitions:

Tax Purposes

Considerations or actions taken with regard to taxation, such as reporting income, deductions, and credits.

Bonds Redeemed Early

The process by which an issuer repays the principal amount of bonds before their maturity date.

Redemption Price

The amount paid to redeem a security or investment, often found in the terms of bonds or preferred stock.

Carrying Value

The book value of assets and liabilities as presented on a company’s balance sheet, which is the original cost minus any depreciation, amortization, or impairment costs.