TruColor Printers Inc. has purchased a sophisticated printing press for $1 million. Which of the following is most likely to be true about the printing press?
a. It will be depreciated over its useful life.
b. It will be charged as an expense in the year it is bought.
c. It will more likely be short-lived.
d. It will retain its identity in the final product.
ANSWER: a
The printing press purchased by TruColor Printers Inc. will be depreciated over its useful life as it is a major equipment. Major equipment includes large machines, mainframe computers, and buildings. Such items are depreciated over time rather than charged as an expense in the year it is purchased.
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