ust Choose The Corect Answer, No Need For Further Explanation. 5. Which one of t
ID: 2580499 • Letter: U
Question
ust Choose The Corect Answer, No Need For Further Explanation. 5. Which one of the following items is NOT considered a part of the cost of a truck purchased for business use? a. Sales tax b. Truck insuran c. Freight charges d. Cost of lettering on side of truck 6. A machine was purchased for $180,000 and it was estimated to have an $12,000 salvage value at the end of its useful life Monthly depreciation expense of $1,750 was recorded using the straight-line method. The annual depreciation rate is a. 15.0% b. 2.5% c. 12.5% d. 10.0% 7. A factory machine was purchased for $140,000 on January 1,2017. It was estimated that it would have a $28,000 salvage value at the end of its 5-year useful life. It was also estimated that the machine would be run 40,000 hours in the 5 years. If the actual number of machine hours ran in 2017 was 4,000 hours and the company uses the units-of-activity method of depreciation, the amount of depreciation expense for 2017 would be a. $14,000 b. $22,400 c. $28,000 d. $11,200 8. If $40,000 is put in a savings account paying interest of 4% compounded annually, what amount will be in the account at the end of 5 years? a. $32,878 b. $48,000 c. $48,620 d. $48,666Explanation / Answer
ans)
5. option (b) Truck insurance
6.option (c) 12.5%
1750 X 12 / 180,000 - 12000
= 21000 / 168000
= 12.5%
7. option (d) 11200
140,000 - 28000 / 40,000 hours = 2.8 per hour
4000 X 2.8 = $11200
8) option (d) $48666
A = P ( 1 + r )n
A = 40,000 ( 1 + 0.04)5
= 40,000 X 1.216 = 48666
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