An Asset with an Initial Value of $15,000 Has a Salvage

question 47

Multiple Choice

An asset with an initial value of $15,000 has a salvage value of $2000 after 10 years.What is the absolute value of the difference between the depreciation expenses entered in the books in the seventh year under the straight-line method and under the declining-balance method?

• A)$682.88
• B)$482.87
• C)$631.99
• D)$2239.43

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Definitions:

Inventory Increase

A rise in the quantity or value of goods and materials that a company holds for the purpose of sale or production.

Investing Activities

Transactions involving the purchase or sale of long-term assets and investments, reflected in the cash flow statement.

Bonds Payable

Long-term liabilities representing money owed by a corporation or government to bondholders, to be repaid at a future date.

Receipts

Refers to the total amount of money received by a company during a specific period, often from sales of goods or services.