Martin Company Purchases a Machine at the Beginning of the Year

question 52

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

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Definitions:

Income Statement

A document detailing a firm's income, outlays, and profit over a given timeframe.

Balance Sheet

A financial statement that outlines an entity's assets, liabilities, and equity at a specific point in time.

Unearned Revenue

Money received by an entity for services not yet performed or goods not yet delivered.

Stockholders' Equity

The residual interest in the assets of a corporation after deducting liabilities, representing the ownership share of stockholders.