Cramer Company Purchased Equipment on May 1,2014 for $100,000

question 101

Multiple Choice

Cramer Company purchased equipment on May 1,2014 for $100,000.The residual value is $10,000 and the estimated useful life is 10 years.What is the Depreciation Expense for the year ending December 31,2014,if the company uses the straight-line method?

• A)$5,250
• B)$6,000
• C)$6,667
• D)$9,000

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Definitions:

Market Price

The price at which goods and services are currently being sold in the market, influenced by supply and demand.

Equilibrium Price

The price point in the market at which the amount of goods being offered is equal to the amount of goods being sought.

Quantity Supplied

The volume of a commodity or service that sellers are ready and capable of providing at a specific price within a given period.

Surplus

An excess of production or supply over demand, often resulting in lower prices.