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Grace
1 month ago
12

Tory Enterprises pays $238,400 for equipment that will last five years and have a $43,600 salvage value. By using the equipment

in its operations for five years, the company expects to earn $88,500 annually, after deducting all expenses except depreciation. (Round your answers to the nearest whole dollar.)
Calculate annual depreciation expenses using double-declining-balance method.
Business
1 answer:
marusya05 [3.7K]1 month ago
3 0
Depreciation refers to the reduction in an asset's value over time due to wear and tear. Calculating depreciation using the straight-line method results in $38,960 written off annually. This yields a depreciation rate of 16.34% per year. In comparison, using the double declining method results in a depreciation rate of 32.68% annually, with the first year's depreciation amount being $77,909.
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Response:

The correct choice is (c)

Clarification:

Given:

The balance in Sue's account before any spending is $899.83

Expenses include:

Rent = $353.76

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Total expenses amount to 353.76 + 32.79 + 60.26 + 55.62 + 80.4 + 35.77

                          = $618.60

Remaining in the account after these transactions = 899.83 - 618.60

                                                                                               = $281.23

Sue's share towards the TV cost = $305.22

If she proceeds with purchasing the TV, her balance would drop below zero by $23.99 (281.23 - 305.22) since she wouldn't have enough left to cover the TV's price.

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Answer:

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