A company purchased a weaving machine for $190,000. The machine has a useful life of 8 years and a residual value of $10,000. It is estimated that the machine could produce 75,000 bolts of woven fabric over its useful life. In the first year, 15,000 bolts were produced. In the second year, production increased to 19,000 units. Using the units-of-production method, what is the book value of the machine at the end of the second year?
A. $190,000.
B. $108,400.
C. $180,000.
D. $144,400.
E. $81,600.
Answer: B
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Which of the following is not true regarding the lower-of-cost-or-market basis for inventory valuation?
a. It is a conservative accounting policy. b. It recognizes losses from decreases in market value before a sale occurs. c. It recognizes gains from increases in market value above original acquisition cost only when a sale occurs. d. It reports inventories on the balance sheet at amounts that are never greater, but may be less, than acquisition cost. e. It reports inventories on the balance sheet at amounts that are equal to the acquisition cost less a normal profit margin.
Using a single performance evaluation criterion for an investment center
a. Allows multinational investment centers performances to be equitably compared. b. Can result in manupulation of the performance measure. c. Is most effective because a manager can concentrate on a single goal. d. Is only appropriate if the criterion is non-monetory.
At Acme Global, customer service is an important priority. However, Michael’s latest performance appraisal focused on his lack of critical thinking and his lack of knowledge of the company’s technology. What aspect of good performance appraisals does Michael’s appraisal appear to be missing?
A. Valid B. Based on mission and objectives C. Accepted D. Feasible E. Positivity
The property and liability insurance industry fluctuates between periods of increasing insurance rates and tight underwriting standards,
and decreasing insurance rates and loose underwriting standards. Profitability in the industry follows these cyclical movements. What is this pattern of fluctuations called? A) the claims cycle B) the underwriting cycle C) the business cycle D) the accounting cycle