Ace Company Purchased a Machine Valued at $320,000 on August

question 60

Multiple Choice

Ace Company purchased a machine valued at $320,000 on August 1.The equipment has an estimated useful life of five years or 2.5 million units.The equipment is estimated to have a salvage value of $8,200.Assuming the double-declining-balance method of depreciation,what is the amount of depreciation expense that needs to be recorded at the end of the second year?

• A) $128,000
• B)$62,360
• C)$90,880
• D)$88,750
• E)$106,667

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Definitions:

Accounts Receivable

Represents money owed to a business by its customers for goods or services delivered on credit.

Merchandise Purchases

The total cost incurred by a retail company to buy goods for resale during a particular accounting period.

Federal Income Taxes

Taxes levied by the federal government on the annual earnings of individuals, corporations, trusts, and other legal entities.

Credit Sales

Transactions where goods or services are provided to a customer with the agreement that payment will be made at a later date.