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52.
Harvard Company purchased equipment having an invoice price of $11,500. The terms of
sale were 2/10, n/30, and Harvard paid within the discount period. In addition, Harvard
paid a $160 delivery charge, $185 installation charge, and $931 sales tax. The amount
recorded as the cost of this equipment is:
53.
Land and a warehouse were acquired for $890,000. What amounts should be recorded in
the accounting records for the land and for the warehouse if an appraisal showed the
estimated values to be $400,000 for the land and $700,000 for the warehouse?
54.
Land is purchased for $456,000. Additional costs include a $30,300 fee to a broker, a
survey fee of $3,400, $2,750 to construct a fence, and a legal fee of $12,500. What is the
cost of the land?
55.
Yale Company purchased equipment having an invoice price of $21,500. The terms of sale
were 2/10, n/30, and Yale paid within the discount period. In addition, Yale paid a $320
delivery charge, $350 installation charge, and $1,183 sales tax. The amount recorded as
the cost of this equipment is:
56.
Which of the following is a capital expenditure?
57.
The cost of a new windshield wiper on a delivery vehicle would be classified as:
58.
Which of the following should
not
be treated as a revenue expenditure?
59.
Which of the following is
not
a capital expenditure?
60.
The application of the matching principle to depreciation of plant and equipment can best
be described as:
61.
Capital expenditures are recorded as:
62.
Revenue expenditures are recorded as:
63.
If an asset is determined to be impaired, it should be:
64.
When straight-line depreciation is in use, the depreciation rate of an asset is equal to:
65.
If the 150% declining balance method is being used and an asset has a useful life of 20
years. What is the depreciation rate?
66.
Machinery is purchased on May 15, 2015 for $50,000 with a $5,000 salvage value and a
five year life. The half year convention is followed. What method of depreciation will give
the highest amount of depreciation expense in year 2?
67.
When comparing the units-of-output method of depreciation with straight-line
depreciation:
68.
The term accumulated depreciation, as used in accounting, is best defined as:
69.
Which depreciation method is most commonly used among publicly owned corporations?
70.
The book value of an asset in the plant and equipment category is:
71.
In the fixed-percentage-of-declining-balance depreciation method, the book value of the
asset is multiplied by:
72.
Which of the following situations is impossible?
73.
Responsibility for selection of the depreciation methods used in financial reporting rests
with:
74.
With respect to depreciation policies, the principle of consistency means:
75.
The book value of equipment:
76.
When a company uses straight-line depreciation and the half-year convention, assets with
a five-year life:
77.
The adjusting entries to record depreciation or amortization expense or to write down
assets that have become impaired:
78.
On March 2, 2014, Glen Industries purchased a fleet of automobiles at a cost of $550,000.
The cars are to be depreciated by the straight-line method over five years with no salvage
value. Glen uses the half-year convention to compute depreciation for fractional periods.
The book value of the fleet of automobiles at December 31, 2015, will be:
79.
On April 8, 2015, Jupitor Corp. acquired equipment at a cost of $480,000. The equipment is
to be depreciated by the straight-line method over six years with no provision for salvage
value. Depreciation for fractional years is computed by rounding the ownership period to
the nearest month. Depreciation expense recognized in 2015 will be:
9-38
80.
Machinery acquired new on January 1 at a cost of $80,000 was estimated to have a useful
life of 10 years and a residual salvage value of $20,000. Straight-line depreciation was
used. On January 1, following six full years of use of the machinery, management decided
that the estimate of useful life had been too long and that the machinery would have to be
retired after three years, that is, at the end of the ninth year of service. Under this revised
estimate, the depreciation expense for the seventh year of use would be:
On April 2, 2014, Victor, Inc. acquired a new piece of filtering equipment. The cost of the
equipment was $160,000 with a residual value of $20,000 at the end of its estimated
useful lifetime of 4 years.
81.
Refer to the information above. Assume that in its financial statements, Victor uses
straight-line depreciation and rounds depreciation for fractional years to the nearest whole
month. Depreciation recognized on this equipment in 2014 and 2015 will be:
82.
Refer to the information above. Assume that in its financial statements, Victor uses
straight-line depreciation and the half-year convention. Depreciation recognized on this
equipment in 2014 and 2015 will be:
9-40
83.
Refer to the information above. If Victor uses straight-line depreciation with the half-year
convention, the book value of the equipment at December 31, 2015 will be:
On April 30, 2014, Tilton Products purchased machinery for $88,000. The useful life of this
machinery is estimated at 8 years, with an $8,000 residual value.
