The Cost of an Asset Is $1,000,000,and Its Residual Value

question 53

Multiple Choice

The cost of an asset is $1,000,000,and its residual value is $290,000.Estimated useful life of the asset is five years.Calculate depreciation for the first year using the double-declining-balance method of depreciation.

• A)$284,000
• B)$400,000
• C)$200,000
• D)$142,000

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Definitions:

Portability Problem

Challenges that arise when a product or solution cannot easily be transferred from one environment or system to another.

Pension Benefits

The regular payments made to a retired or disabled employee, often based on salary and years of service.

Defined Benefit Plans

Pension plans in which retirement benefits are set according to a fixed formula.

Endowment Funds

Organizations chartered to invest money for usually tax-exempt institutions.