On January 1, 2011, a company purchased a machine for $138,000. In addition, the company paid delivery costs of $1,200 and $4,800 to have the machine installed. At the end of 5 years, the company expects the machine to have a residual value of $11,500. The company expects the machine will last 10,000 hours. In the first year, the company used the machine for 3,000 hours. (Use these facts to answer questions 3 8)

Before depreciating the machine, what total amount will the company record as an asset for this machine?

Question 3 options:

$144,000

$138,000

$139,200

$142,800

On January 1, 2011, a company purchased a machine for $138,000. In addition, the company paid delivery costs of $1,200 and $4,800 to have the machine installed. At the end of 5 years, the company expects the machine to have a residual value of $11,500. The company expects the machine will last 10,000 hours. In the first year, the company used the machine for 3,000 hours. (Use these facts to answer questions 3 8)

Regardless of the depreciation method, what will be the amount of accumulated depreciation after the five years?

Question 4 options:

$128,500

$130,000

$132,500

$135,000

On January 1, 2011, a company purchased a machine for $138,000. In addition, the company paid delivery costs of $1,200 and $4,800 to have the machine installed. At the end of 5 years, the company expects the machine to have a residual value of $11,500. The company expects the machine will last 10,000 hours. In the first year, the company used the machine for 3,000 hours. (Use these facts to answer questions 3 8)

If the company used straight line method for depreciation, how much depreciation expense would be recorded in the first year?

Question 5 options:

$30,000

$28,000

$29,500

$26,500

On January 1, 2011, a company purchased a machine for $138,000. In addition, the company paid delivery costs of $1,200 and $4,800 to have the machine installed. At the end of 5 years, the company expects the machine to have a residual value of $11,500. The company expects the machine will last 10,000 hours. In the first year, the company used the machine for 3,000 hours. (Use these facts to answer questions 3 8)

If the company used units of production method for depreciation, how much depreciation expense would be recorded in the first year?

Question 6 options:

$40,500

$43,750

$39,750

$54,500

On January 1, 2011, a company purchased a machine for $138,000. In addition, the company paid delivery costs of $1,200 and $4,800 to have the machine installed. At the end of 5 years, the company expects the machine to have a residual value of $11,500. The company expects the machine will last 10,000 hours. In the first year, the company used the machine for 3,000 hours. (Use these facts to answer questions 3 8)

If the company used double declining balance method for depreciation, how much depreciation expense would be recorded in the first year?

Question 7 options:

$57,600

$60,400

$40,300

$55,430

On January 1, 2011, a company purchased a machine for $138,000. In addition, the company paid delivery costs of $1,200 and $4,800 to have the machine installed. At the end of 5 years, the company expects the machine to have a residual value of $11,500. The company expects the machine will last 10,000 hours. In the first year, the company used the machine for 3,000 hours. (Use these facts to answer questions 3 8)

If the company sells the machine at the end of 5 years and receives $11,000, the journal entry to record the sale will include which of the following?

Question 8 options:

	Debit to Accumulated Depreciation for $138,000
	Credit to Machine for $138,000
	Debit to Loss on Sale for $500
	Credit to Gain for $500