A Company Purchased Equipment for $100,000 in 2012

question 53

Multiple Choice

A company purchased equipment for $100,000 in 2012.The machine will be used for 10,000 hours and will have a residual value of $20,000.The equipment was used for 2,400 hours in 2012.How much depreciation will be recorded in 2012 if the company elects the units-of-production method?

• A) $19,200
• B) $20,000
• C) $10,000
• D) $24,000

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Definitions:

Limited Warranty

A warranty that restricts the conditions under which a product can be returned, repaired, or replaced.

Uniform Commercial Code

A comprehensive set of laws governing commercial transactions in the United States, intended to harmonize the law of sales and other commercial dealings across states.

Consumer Goods

Products that are bought and used by individuals for personal consumption, as opposed to industrial or commercial use.

Uniform Commercial Code

A comprehensive set of laws governing commercial transactions in the United States, designed to harmonize the law of sales and other commercial dealings across states.