Machinery Is Purchased on 15 May 2009 for $50,000 with a $5,000

question 121

Multiple Choice

Machinery is purchased on 15 May 2009 for $50,000 with a $5,000 salvage value and a five year life. The half year convention is followed. What method of depreciation will give the highest amount of depreciation expense in year 2?

• A) Straight line
• B) Double declining balance
• C) 150% declining balance
• D) Amount cannot be determined

---

Definitions:

Accounts Payable Journal

A ledger that records all short-term obligations or debts a company owes to suppliers and creditors.

Sales Journal

A specialized journal used to record all of a company's sales on credit.

Controlling Account

A general ledger account that summarizes the total balances of several subsidiary accounts, providing an overview and facilitating reconciliation.

Subsidiary Ledger

A detailed ledger that contains the individual accounts related to a specific main account in the general ledger, used to organize and manage specific types of transactions.