[The Following Information Applies to the Questions Displayed Below

question 93

Multiple Choice

[The following information applies to the questions displayed below.]

Harding Corporation acquired real estate that contained land, building and equipment. The property cost Harding $1,900,000. Harding paid $350,000 and issued a note payable for the remainder of the cost. An appraisal of the property reported the following values: Land, $374,000; Building, $1,100,000 and Equipment, $726,000.

-Assume that Harding uses the units-of-production method when depreciating its equipment.Harding estimates that the purchased equipment will produce 1,000,000 units over its 5-year useful life and has a salvage value of $34,000.Harding produced 265,000 units with the equipment by the end of the first year of purchase.Which amount below is closest to the amount Harding will record for depreciation expense for the equipment in the first year?

• A)$193,450
• B)$125,200
• C)$157,145
• D)$165,890

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Definitions:

Import Competition

The competitive pressure on domestic companies from foreign products and services entering the domestic market.

Oligopoly

A market structure characterized by a small number of large firms that dominate the market, leading to limited competition and the potential for collaborative behavior.

Differentiated Product

A product that is distinguished from similar products offered by competitors through unique features, branding, or quality, allowing the company to potentially command a higher price.