Hydra Company Entered into a Direct-Financing Lease with Bridges Company

question 13

Multiple Choice

Hydra Company entered into a direct-financing lease with Bridges Company for the use of an asset which cost Hydra $195,000.The lease agreement contained a bargain purchase option effective immediately after the fifth rental,which provided that Bridges could purchase the asset at that time.The estimated life of the asset was 10 years with an estimated residual value of $500.Assuming that Bridges uses straight-line depreciation,Bridges's annual depreciation expense would be

• A) $19,500
• B) $19,450
• C) $19,550
• D) $19,000

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Definitions:

Bargaining Committee

A group of employees or union members designated to negotiate labor contracts with their employer.

Hourly Wage

Payment to employees based on the number of hours worked, set as a rate per hour.

NLRB

The National Labor Relations Board, a US government agency that enforces US labor law in relation to collective bargaining and unfair labor practices.

Election Campaign

An organized effort which seeks to influence the decision-making process within a specific group by selecting individuals for public office.