The Roger Company Leased a Machine at the Beginning of 2014

question 106

Multiple Choice

The Roger Company leased a machine at the beginning of 2014. The machine was properly capitalized by Roger at $73,734.84. A lease payment of $16,563 is due at the end of each year. The expected life of the machine is seven years, and the term of the lease is five years. At the beginning of 2019, the machine will be returned to the lessor. Both Roger and the lessor use the straight-line method of depreciation. What amount of depreciation expense should Roger record in 2014 for the machine (round calculations up to the nearest dollar) ?

• A) $14,600
• B) $14,747
• C) $16,563
• D) $17,000

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Definitions:

Mediation

An alternative method of resolving disputes where an impartial third party aids those in disagreement to come to a consensus that is agreeable to all involved.

Picket Line

A boundary established by striking workers outside an employer's premises, meant to discourage others from entering the site during a strike.

Discharged Workers

Employees who have been terminated from their job by their employer.

Employer Initiative

Actions initiated by employers to improve workplace conditions, productivity, or relations with employees, often including innovative practices and policies.