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Multiple choice

If Reneta's CDs purchases a new cash register for $2,700 and plans to use it for three years before disposing of it for an estimated $300, how much depreciation will Renata recognize the first year under the double-declining-balance method?

a. $1,800

b. $ 900

c. $1,600

d. $ 800

Tanner owns and operates a kite store. He buys kites for $15 each. He pays a commission for each kite sold of $3. His advertising costs are $2 per kite. If Tanner sells the kite for $30, how much net income will he make per kite?

a. $ 8

b. $10

c. $13

d. $28

Solution Preview

1. The double decling rate is 2/3=66.67% ( 2/useful life)
The depreciation in double decling method is carrying value X ...

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