Best Model Company Reported $61,000 in Depreciation Expense for the Current

question 192

Multiple Choice

Best Model Company reported $61,000 in depreciation expense for the current year using the double-declining-balance method. The company estimates that it saved net cash of $12,000 in income taxes by using the double-declining-balance instead of the straight-line method. The company has a 30% tax rate. What would depreciation expense have been using the straight-line method?

• A) $43,857
• B) $40,000
• C) $21,000
• D) $7,200

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Definitions:

Contingency Approaches

Management theories suggesting that the best way to handle any situation depends on the specifics of the environment and circumstances.

Normative Theories

Theories that provide guidelines or frameworks for understanding how media should operate in society based on ethical values and principles.

Laissez-faire Leadership

A leadership style where the leader takes a hands-off approach, allowing team members to make decisions and solve problems on their own.

Trait Approach

A perspective in psychology that focuses on the identification and measurement of specific characteristics that differentiate individuals.