Centennial Owns a Machine That It Purchased on Jan 1

question 3

Multiple Choice

Centennial owns a machine that it purchased on Jan 1, 2010 for $400,000. The machine had an estimated useful life of 10 years with a production capacity for 80,000 units and was expected to have no residual value. The company uses the units-of-production method to record depreciation. The machine produced 15,000 units in 2010, 18,000 units in 2011 and 25,000 units in 2012. The machine was sold on December 30, 2012 for $350,000. What was the accumulated depreciation at December 31, 2010?

• A)$39,000
• B)$40,000
• C)$75,000
• D)$90,000

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Definitions:

Applicable Laws

The set of relevant laws and regulations that apply within the jurisdiction of a business operation or transaction.

Sarbanes-Oxley Act

A U.S. law enacted in 2002 to protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to securities laws.

Sole Proprietorships

A rephrasing of proprietorship; a business structure where a single individual owns and runs the business, bearing all profits and responsibilities.

Internal Controls

The policies and procedures used to safeguard assets, ensure accurate business information, and ensure compliance with laws and regulations.