A Machine Has a Cost of $15,000,an Estimated Residual Value

question 105

Multiple Choice

A machine has a cost of $15,000,an estimated residual value of $3,000,and an estimated useful life of four years.The machine is being depreciated on a straight-line basis.At the end of the second year,what amount will be reported for accumulated depreciation?

• A)$9,000.
• B)$6,000.
• C)$7,500.
• D)$3,000.

---

Definitions:

Stock Split

An action by a company to divide its existing shares into multiple shares to boost the liquidity of the shares, though the overall value of ownership remains the same.

Total Market Value

The aggregate valuation of a company or asset in the marketplace, calculated by multiplying the current market price of its shares by the total number of shares outstanding.

Price Following Split

The adjusted price of a stock after the company carries out a stock split, intended to make the stock more affordable to investors.

Residual Dividend Policy

A strategy where dividends to shareholders are paid from the residual or leftover equity once all project and operational costs have been met.