Seall-Test Ltd

question 116

Multiple Choice

Seall-Test Ltd. owns a machine that it purchased on Jan 1, 2010 for $600,000. The machine had an estimated useful life of 10 years and an estimated residual value of $100,000. The company uses the declining balance method with a rate of 20%. The machine was sold on December 31, 2012 for $140,000. What was the depreciation expense for 2011?

• A)$50,000
• B)$60,000
• C)$96,000
• D)$120,000

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Definitions:

Marginal Cost

The expenditure involved in creating one more unit of a product or service.

Demand Curve

A diagram displaying the link between the value of an item and the quantity of that item that shoppers are eager and financially capable of purchasing at various cost points.

Monopolist

An individual or entity that has exclusive control over the production or sale of a product or service within a market, preventing competition.

Marginal Revenue

The additional revenue that a business earns from selling one more unit of a good or service.