Question 1

What would be the depreciation expense using double declining-balance to compute the expense for year 2 of a machine costing $20,000,when residual value is $3,000,and useful life is 4 years?

Accepted Answer

A) $3,600 
B) $6,000 
C) $5,000 
D) $3,000

Question 2

Josh Kindel purchased equipment for $50,000 on January 1.Its residual value is $5,000 with a useful life of 10 years.The amount of depreciation expense in the first year under the double declining-balance method is:

Accepted Answer

A) $9,000. 
B) $10,000. 
C) $5,000. 
D) $4,500.

Question 3

Strawberry Supreme purchased new baking equipment for $17,000 subject to terms 3/15,n/45.The discount was taken.Additional costs included sales tax $700 and installation $500.The total cost to be added to the equipment account is:

Accepted Answer

A) $17,000. 
B) $18,200. 
C) $17,690. 
D) $17,190.

Question 4

Which of the following is a non-depreciable asset?

Accepted Answer

A) Desk chairs 
B) Land 
C) Computer 
D) Building

Question 5

Under MACRS,which of the following classes uses the straight-line method?

Accepted Answer

A) 10-year property 
B) 15-year property 
C) 24.5-year property 
D) All of the above are correct.

Question 6

If a plant asset is fully depreciated and discarded,no ________ or ________ will be realized.

Accepted Answer

The answer of If a plant asset is fully depreciated...

Question 7

For each of the following, identify in column 1 the category to which the account belongs, in column 2 the normal balance for the account, in column 3 the financial statement that the account in which the account balance is reported, and in column 4 the account's nature (permanent/temporary).
-$$\begin{array} { | c | c | c | c | c | } 
\hline & \text { Column 1 } & \text { Column 2 } & \text { Column 3 } & \text { Column } 4 \
\hline \text { Loss on goodwill } & & & & \
\hline
\end{array}$$

Accepted Answer

The answer of For each of the following, identify in...

Question 8

For each of the following, identify in column 1 the category to which the account belongs, in column 2 the normal balance for the account, in column 3 the financial statement that the account in which the account balance is reported, and in column 4 the account's nature (permanent/temporary).
-$$\begin{array} { | l | l | l | l | l | } 
\hline & \text { Column 1 } & \text { Column 2 } & \text { Column 3 } & \text { Column } 4 \
\hline \text { Copyright } & & & & \
\hline
\end{array}$$

Accepted Answer

The answer of For each of the following, identify in...

Question 9

A company purchased new computer equipment from a local vendor.An employee offered to pick up the equipment and received a speeding ticket on his way back to the office.The cost of the speeding ticket should not be charged to the cost of the equipment.

Accepted Answer

A) True 
 B)False

Question 10

For each of the following, identify in column 1 the category to which the account belongs, in column 2 the normal balance for the account, in column 3 the financial statement that the account in which the account balance is reported, and in column 4 the account's nature (permanent/temporary).
-

Accepted Answer

The answer of For each of the following, identify in...

Question 11

Eagle Works traded a plant asset with a cost of $25,000 and accumulated depreciation of $22,000 for a similar asset priced at $65,000.Assuming a trade-in of $3,500,the cost basis of the new asset under income tax rules is:

Accepted Answer

A) $62,500. 
B) $65,000. 
C) $68,000. 
D) $64,500.

Question 12

Assuming a useful life of five years,which of the following GAAP methods would most likely result in the most depreciation in the first year?

Accepted Answer

A) Straight-line 
B) MACRS 
C) Double declining-balance 
D) None of these answers is correct.

Question 13

The write-off of an intangible asset is called:

Accepted Answer

A) depreciation. 
B) amortization. 
C) impairment. 
D) deterioration.

Question 14

The cost of equipment is expensed:

Accepted Answer

A) at the time it is paid. 
B) over the periods that benefit the company. 
C) in the period it is purchased. 
D) in the period it is sold.

Question 15

Prepare journal entries for the following for Bartz,Inc.
May 11 Replaced the engine in a Van #1,paying cash of $5,400.
May 18 Paid cash for a tune-up of the engine in Van #2 of $570.
May 29 Paid cash to add a lift to Van #2 of $3,700

Accepted Answer

The answer of Prepare journal entries for the following for...

Question 16

What would be the depreciation expense in year 1,using units-of-production,for a molding machine that cost $22,000,had a useful life of 7 years,and an estimated total machine hours of 40,000? The salvage value is $2,000 and production in year 1 was 8,000 hours.

Accepted Answer

A) $5,000 
B) $4,400 
C) $6,000 
D) $4,000

Question 17

For each of the following, identify in column 1 the category to which the account belongs, in column 2 the normal balance for the account, in column 3 the financial statement that the account in which the account balance is reported, and in column 4 the account's nature (permanent/temporary).
-

Accepted Answer

The answer of For each of the following, identify in...

Question 18

For each of the following, identify in column 1 the category to which the account belongs, in column 2 the normal balance for the account, in column 3 the financial statement that the account in which the account balance is reported, and in column 4 the account's nature (permanent/temporary).
-

Accepted Answer

The answer of For each of the following, identify in...

Question 19

Journalize the following transactions for Pets R Us:
Mar.5 Sold a truck for $10,000 that cost $15,000 and had an accumulated depreciation of $12,000.
Mar.10 A machine costing $13,000 with accumulated depreciation of $10,500 was destroyed in a fire.No claim was filed.
May 15 Traded in a machine costing $25,000,with $19,000 of accumulated depreciation,for a new machine costing $32,000 with a trade-in allowance of$ 9,000.

Accepted Answer

The answer of Journalize the following transactions for Pets R...

Question 20

The double declining-balance method is an accelerated depreciation method.

Accepted Answer

A) True 
 B)False

Exam 16: Accounting for Property,plant,equipment,and Intangible Assets

What would be the depreciation expense using double declining-balance to compute the expense for year 2 of a machine costing $20,000,when residual value is $3,000,and useful life is 4 years?

Josh Kindel purchased equipment for $50,000 on January 1.Its residual value is $5,000 with a useful life of 10 years.The amount of depreciation expense in the first year under the double declining-balance method is:

Strawberry Supreme purchased new baking equipment for $17,000 subject to terms 3/15,n/45.The discount was taken.Additional costs included sales tax $700 and installation $500.The total cost to be added to the equipment account is:

Which of the following is a non-depreciable asset?

Under MACRS,which of the following classes uses the straight-line method?

If a plant asset is fully depreciated and discarded,no or will be realized.

A company purchased new computer equipment from a local vendor.An employee offered to pick up the equipment and received a speeding ticket on his way back to the office.The cost of the speeding ticket should not be charged to the cost of the equipment.

For each of the following, identify in column 1 the category to which the account belongs, in column 2 the normal balance for the account, in column 3 the financial statement that the account in which the account balance is reported, and in column 4 the account's nature (permanent/temporary). -

Eagle Works traded a plant asset with a cost of $25,000 and accumulated depreciation of $22,000 for a similar asset priced at $65,000.Assuming a trade-in of $3,500,the cost basis of the new asset under income tax rules is:

Assuming a useful life of five years,which of the following GAAP methods would most likely result in the most depreciation in the first year?

The write-off of an intangible asset is called:

The cost of equipment is expensed:

Prepare journal entries for the following for Bartz,Inc. May 11 Replaced the engine in a Van #1,paying cash of $5,400. May 18 Paid cash for a tune-up of the engine in Van #2 of $570. May 29 Paid cash to add a lift to Van #2 of $3,700

What would be the depreciation expense in year 1,using units-of-production,for a molding machine that cost $22,000,had a useful life of 7 years,and an estimated total machine hours of 40,000? The salvage value is $2,000 and production in year 1 was 8,000 hours.

For each of the following, identify in column 1 the category to which the account belongs, in column 2 the normal balance for the account, in column 3 the financial statement that the account in which the account balance is reported, and in column 4 the account's nature (permanent/temporary). -

For each of the following, identify in column 1 the category to which the account belongs, in column 2 the normal balance for the account, in column 3 the financial statement that the account in which the account balance is reported, and in column 4 the account's nature (permanent/temporary). -

The double declining-balance method is an accelerated depreciation method.