Martin Company Purchases a Machine at the Beginning of the Year

question 115

Multiple Choice

Martin Company purchases a machine at the beginning of the year at a cost of $60,000.The machine is depreciated using the straight-line method.The machine's useful life is estimated to be 4 years with a $5,000 salvage value.Depreciation expense in year 4 is:

• A)$15,000.
• B)$13,750.
• C)$55,000.
• D)$60,000.
• E)$0.

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Definitions:

Ratify

To officially sanction or ratify an agreement or treaty, thereby making it legally binding.

Contractual Capacity

The legal ability of a party to enter into a contract, including being of legal age and having sound mind.

Undisclosed Principal

A situation where an agent acts on behalf of a principal, but the identity of the principal is not revealed to the third party involved in the transaction.

Liquor Sale

The regulated process of selling alcoholic beverages, subject to various laws and licenses depending on the jurisdiction.