On January 1,20A,Straight,Inc

question 63

Multiple Choice

On January 1,20A,Straight,Inc.,purchased a machine with a cash price of $9,500.Straight also paid $500 for transportation and installation.The expected useful life of the machine is 5 years and the residual value is $500.Assuming straight-line depreciation,the annual depreciation expense would be which of the following?

• A)$1,800
• B)$1,900
• C)$2,000
• D)$2,100

---

Definitions:

Total Asset Turnover

A financial metric that measures a company's efficiency in using its assets to generate revenue.

Stretching Payables

Extending the period to pay bills as long as possible without incurring penalties, to improve short-term liquidity.

Current Liabilities

Current liabilities are a company's debts or obligations that are due to be paid to creditors within one year.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations.