Wexford Co. Wexford Co. Purchased a New Delivery Truck at the Beginning

question 56

Multiple Choice

Wexford Co.

Wexford Co. purchased a new delivery truck at the beginning of 2017. The truck has a cost of $37,000, an estimated life of five years, and an estimated residual value of $7,000. A full year's depreciation expense is to be recorded in 2017. The truck was driven 20,000 miles during 2017 and 24,000 miles during 2018. The number of expected miles over five years is 100,000.

-Refer to the information about Wexford Co.
Wexford Co.wants to use the depreciation method that will result in the highest depreciation expense for 2017.Which method should be used?

• A)Straight-line
• B)Units-of-production
• C)Double-declining-balance
• D)All methods create the same income in 2017.

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Definitions:

Revealed Preferences

is an economic theory that infers consumers' preferences based on their purchasing habits, assuming that their choices reveal their preference structure.

Francs

A currency that was previously used in countries like France, Switzerland, Belgium, and Luxembourg, with some forms still in use today in a limited capacity.

Consumption

The use of goods and services by households or the economy, often seen as a primary indicator of economic health.

Revealed Preferences

A concept in economics that studies consumer behavior based on the choices they make, revealing their preferences.