On January 1,a Machine with a Useful Life of Five

question 22

Multiple Choice

On January 1,a machine with a useful life of five years and a residual value of $4,500 is purchased for $22,500.What is the depreciation expense in year 2 using the double-declining-balance method?

• A)$5,400
• B)$7,200
• C)$6,120
• D)$13,500

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Definitions:

Drugstores

Retail establishments that sell medications and other health-related products.

Service Retailer

is a type of retailer that primarily sells services rather than tangible products, such as salons, repair shops, and fitness centers.

Oil Change

A routine maintenance service for vehicles involving the replacement of the engine's oil and oil filter to ensure proper engine function.

Off-price Retailers

Stores that sell brand name and designer merchandise at lower prices than traditional retail outlets by taking advantage of overstock, last season's products, or bulk buying.