Forwind Ltd Has Recently Acquired a Machine That Cost $29,000

question 1

Multiple Choice

Forwind Ltd has recently acquired a machine that cost $29,000.The machine normally remains productive for 6 years.It is expected to continue in the production process at Forwind for 8 years due to the excellent maintenance and operating policies in place at Forwind.The machine has the capacity to produce 20,000 units over a 6 year life and 27,000 units over an 8 year life.Its salvage value after 6 years is expected to be $2,500 and after 8 years $1,000.What depreciation would be charged in the first year of the machine's operation when 4,000 units were produced (rounded to the nearest dollar) ?

• A) $5,600
• B) $4,148
• C) $4,296
• D) $5,300
• E) None of the given answers.

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Definitions:

Liable

Legally responsible or obligated, often in the context of owing compensation for harm or damages caused.

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A legal responsibility for one's actions or omissions, which may result in having to pay damages or make restitution in a civil lawsuit.

Instrument

A legal document formally evidencing a right, obligation, or financial transaction.

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Indicates the act of confirming or acknowledging something officially.