Rand Company Purchases and Places into Service a Company Automobile

question 55

Multiple Choice

Rand Company purchases and places into service a company automobile costing $40,000 in April 2015.What is the 2015 depreciation deduction on the auto?

• A)$2,960
• B)$7,200
• C)$8,000
• D)$11,160
• E)$40,000

---

Definitions:

Balance Sheet

A financial statement that shows a company's assets, liabilities, and equity at a specific point in time, reflecting its financial standing.

Order of Magnitude

An estimation or classification of size, level, or importance that indicates the scale or position in a systematic ranking or hierarchy.

Vacation Benefits

Benefits offered by employers that provide employees with paid time off based on the length of service or other criteria.

Earn

To receive income in exchange for services rendered or as a return on investment.