A Company Paid $17,000 for a Vehicle That Had an Estimated

question 123

Multiple Choice

A company paid $17,000 for a vehicle that had an estimated useful life of 4 years,total capacity of 100,000 miles,and a residual value of $1,000.After 2 full years of using the vehicle (20,000 miles in year 1 and 27,000 miles in year 2) ,the company sold the vehicle for $6,000 and reported a loss on disposal of $3,480.What method of depreciation did the company use?

• A)Units-of-production method
• B)Double-declining-balance method
• C)Straight-line method
• D)None of the answers are acceptable

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Definitions:

Windings

Coils of wire in electric motors or transformers that create magnetic fields or induce voltage when electric current passes through them.

Microfarad AC

A unit of capacitance used in alternating current (AC) circuits, often related to the capacitance of capacitors in such circuits.

Electrolytic

Pertaining to the process of electrolysis, where electrical current drives a chemical reaction, often used in the context of electrolytic capacitors in electronics or the production of chemicals like chlorine or hydrogen.

Energized Circuit

A circuit in which current is flowing and voltage is present, making it capable of performing work or causing an effect.