Eastern Rug Distributors Acquired a Computer for $ 7000 on 31

question 19

Multiple Choice

Eastern Rug Distributors acquired a computer for $ 7000 on 31 December 2010.Calculate depreciation for the year ended 31 December 2012 using the diminishing-balance method at 20% p.a.Assume a nil residual value.

• A)$1400
• B)$700
• C)$2800
• D)$1120

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Definitions:

Times Interest Earned

This is a financial ratio that measures a company's ability to meet its debt obligations by comparing its interest expenses to its earnings before interest and taxes.

Gross Margin Percentage

A financial metric that indicates the proportion of money left over from revenues after deducting the cost of goods sold, expressed as a percentage of total revenue.

Earnings Per Share

A measurement of a company's profitability, calculated by dividing net income by the number of outstanding shares of its common stock.

Price-Earnings Ratio

A valuation metric for stocks, calculated by dividing the current market price of a share by its earnings per share (EPS).