On January 1, 2015, Zade Manufacturing Company Purchased a Machine

question 117

Multiple Choice

On January 1, 2015, Zade Manufacturing Company purchased a machine for $40,000,000. The company expects to use the machine for 24,000 hours over the next 6 years. The estimated sale value of the machine at the end of the sixth year is $40,000. The company used the machine for 3,600 hours in 2015 and 5,000 hours in 2016. Calculate book value of the machine at the end of 2016 if the company uses the units-of-production method of depreciation.

• A)$25,681,000
• B)$17,777,778
• C)$28,532,688
• D)$24,352,951

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