On January 1,2011,Caravanos Company Purchased for $320,000 a Machine with a Useful

question 28

Multiple Choice

On January 1,2011,Caravanos Company purchased for $320,000 a machine with a useful life of ten years and no salvage value.The machine was depreciated by the double-declining-balance method,and the carrying amount of the machine was $204,800 on December 31,2012.Caravanos changed to the straight-line method on January 1,2013.Caravanos can justify the change.What should be the depreciation expense on this machine for the year ended December 31,2014?

• A) $20,480
• B) 25,600
• C) 32,000
• D) 52,480

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Definitions:

Operations

Encompasses all the activities and processes involved in running a business effectively, focusing on producing goods and providing services efficiently.

Outbound Logistics

The process involved in moving goods from a company to the end user, including warehousing, order fulfillment, and transportation.

Value-Chain Analysis

An analytical framework for identifying business activities that add value to the final product or service in order to gain competitive advantage.

SPA

Typically stands for Sales and Purchase Agreement, a legally binding contract outlining the terms of sale between a buyer and seller.