A Company Purchased a Computer on 1 July 2016

question 49

Multiple Choice

A company purchased a computer on 1 July 2016.The computer has an estimated useful life of 5 years and will have no residual value.It was purchased for $10 000.It is estimated that the computer can be used for 5 000 hours.The computer was used for 450 hours during 2016.If the goal is to record higher depreciation expense in the earlier years,which method should be used?

• A)Units of production
• B)Straight line
• C)First-in,first-out
• D)Reducing balance

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Definitions:

Managerial problem solving

The method by which managers identify, analyze, and resolve issues affecting their organization's operations and objectives.

Certainty

The state of being completely confident or having no doubt about something.

Decision-making

The process of selecting among various options or courses of action.

Rational model

A decision-making strategy that relies on logical and systematic analysis of available information and alternatives to achieve the best possible outcome.