The Novice Corporation Purchased a Machine for $80 000 on 1

question 27

Multiple Choice

The Novice Corporation purchased a machine for $80 000 on 1 January 2018. The machine is expected to have a useful life of 5 years, a residual value of zero, and a production capacity of 120 000 units before it is scrapped. The Novice Corporation uses the units-of-production method to calculate depreciation. For the year ending 31 December 2018, the depreciation was $16 000. The number of units produced during 2019 is 30 000. The carrying amount of the machine at 31 December 2019 is:

• A) $16 000
• B) $20 000
• C) $30 000
• D) $44 000

Recognize pledges and contributions and understand their treatment in not-for-profit accounting.

Understand accounting and reporting practices for capital assets and related contributions in not-for-profit organizations.

Comprehend the requirements and methods for accounting for donated goods and services in not-for-profit organizations.

Identify the purposes of using an encumbrance system in budgeting and accounting for not-for-profit entities.

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Definitions:

Pituitary Gland

A pea-sized gland located at the base of the brain, important in controlling growth, metabolism, and regeneration, often called the "master gland."

Brain

The organ of the central nervous system located in the skull, responsible for coordinating sensory information and directing motor responses; also the center of thought and emotion.

Myxedema

A condition resulting from the hypofunction of the thyroid gland.

Thyroid Hormone

Hormones produced by the thyroid gland, important for regulation of metabolism, energy generation, and neuromuscular function.