A Company Purchases for $24,000 an Asset That Has a Useful

question 211

Multiple Choice

A company purchases for $24,000 an asset that has a useful life of six years and no salvage value.After two years,the company spends $4,000 for a major overhaul that will extend the machine's useful life four years beyond the original six.Assuming straight-line depreciation,how much depreciation should be taken in year 3?

• A) $2,800
• B) $2,500
• C) $2,000
• D) $4,000

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Definitions:

Organizational Learning

The process by which an organization improves its abilities and knowledge through experience and study, contributing to its effectiveness.

Living System

A concept in biology and ecological studies that refers to any system that uses energy for the purposes of growth, maintenance, and reproduction.

Theory Y

A management approach based on the belief that employees are inherently motivated, enjoy their labor, and will seek and accept greater responsibility.

Personally Relevant

Pertaining to or significant in relation to one's own life, interests, or experiences.