Question 1Helmway Company purchased equipment and these costs were incurred:Cash price $21,500Sales taxes $1,800Insurance during transit $320Installation and testing $430Total costs $24,050Presto will record the acquisition cost of the equipment as$21,500$23,300$23,620$24,050Flag this QuestionQuestion 21 pts2. Which one of the following items is not a consideration when recording periodic depreciation expense on plant assets?salvage valueestimated useful lifecost to replace the assetcostFlag this QuestionQuestion 31 ptsThe book value of an asset is equal to theasset’s market value less its historical cost.blue book value relied on by secondary markets.replacement cost of the asset.asset’s cost less accumulated depreciation.Flag this QuestionQuestion 41 ptsA company purchased factory equipment on March 1, 2012 for $64,000. It is estimated that the equipment will have an $8,000 salvage value at the end of its 10-year useful life. Using the straight-line method of depreciation, the amount to be recorded as depreciation expense at December 31, 2012 is5600466764004800Flag this QuestionQuestion 51 ptsA company purchased office equipment for $40,000 and estimated a salvage value of $8,000 at the end of its 6-year useful life. The constant percentage to be applied against book value each year if the double-declining-balance method is used is17%20%25%33%Flag this QuestionQuestion 61 ptsA factory machine was purchased for $75,000 on January 1, 2010. It was estimated that it would have a $15,000 salvage value at the end of its 5-year useful life. It was also estimated that the machine would be run 40,000 hours in the 5 years. The company ran the machine for 5,000 actual hours in 2010. If the company uses the units-of-activity method of depreciation, the amount of depreciation expense for 2010 would be6,0007,50012,00015,000Flag this QuestionQuestion 71 ptsA company purchased factory equipment for $250,000. It is estimated that the equipment will have a $25,000 salvage value at the end of its estimated 10-year useful life. If the company uses the double-declining-balance method of depreciation, the amount of annual depreciation recorded for the second year after purchase would be36,00040,00045,00050,000Flag this QuestionQuestion 81 ptsThe declining-balance method of depreciation producesa decreasing depreciation expense each period.an increasing depreciation expense each period.a declining percentage rate each period.a constant amount of depreciation expense each period.Flag this QuestionQuestion 91 ptsA truck that cost $36,000 and on which $30,000 of accumulated depreciation has been recorded was disposed of for $5,000 cash. The entry to record this event includes acredit to a gain of $1,000.credit to a loss of $1,000.credit to the Truck account for $36,000.credit to Accumulated Depreciation for $30,000.Flag this QuestionQuestion 101 ptsIf disposal of a plant asset occurs during the year, depreciation isnot recorded for the year.recorded for the whole year.not recorded if the asset is scrapped.recorded for the fraction of the year to the date of the disposal.
Recent Comments