Centennial Owns a Machine That It Purchased on Jan 1

question 11

Multiple Choice

Centennial owns a machine that it purchased on Jan 1, 2019 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 2019, 18,000 units in 2020 and 25,000 units in 2021. The machine was sold on December 30, 2021 for $350,000. What was the accumulated depreciation at December 31, 2019?

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

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Definitions:

Non-Exchange Transactions

Transactions where an entity receives value without directly giving equivalent value in exchange, often seen in grants, donations, and government assistance.

Derived Tax Expenditures

Derived tax expenditures refer to the revenue losses that result from tax provisions allowing certain taxpayers to reduce their tax owed through deductions, exclusions, or exemptions based on specific activities or investments.

Voluntary Non-Exchange Transactions

Transactions where an entity receives value without directly giving equivalent value in return, often seen in grants or donations to not-for-profit entities.

Governmental Fund Financial Statements

Financial reports that detail the financial position and results of operations for governmental funds, highlighting revenues, expenditures, and changes in fund balances.