Refer to the Information Above

question 127

Multiple Choice

Refer to the information above. Assume that in its financial statements, Tilton Products uses straight-line depreciation and the half-year convention. Depreciation expense recognized on this machinery in 2009 and 2010 will be:

• A) $7,500 in 2009 and $11,000 in 2010.
• B) $6,000 in 2009 and $12,000 in 2010.
• C) $5,000 in 2009 and $10,000 in 2010.
• D) $5,500 in 2009 and $11,000 in 2010.

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Definitions:

Simple Interest Rates

The rate at which interest is calculated solely on the initial amount of capital, without compounding.

Principal Investment

The original amount of money invested or loaned, on which basis interest and returns are calculated.

GIC

Stands for Guaranteed Investment Certificate, a secure investment that promises to return your principal plus interest.

Investment Savings

Funds set aside in financial instruments or accounts with the goal of generating income or profit over time.