A company acquired some land for 80000 to construct a new

Assignment Help Accounting Basics

Reference no: EM13482092

1. A capital expenditure would appear on the

income statement under operating expenses.

balance sheet under fixed assets.

balance sheet under current assets.

income statement under other expenses.

2. Which of the following expenditures would NOT be included in the cost of an asset?

Freight costs

Vandalism

Sales tax

Surveying fees

3.A company acquired some land for $80,000 to construct a new office complex. Legal fees paid were $2,300, delinquent taxes assumed were $3,400, and $5,850 was paid to remove an old building from which salvaged materials sold for $1,950. What is the cost basis for the land?

$85,700

$89,600

$91,550

$93,500

4.Book value is defined as

current market value less residual value.

cost less residual value.

current market value less accumulated depreciation.

cost less accumulated depreciation.

5. Which method of depreciation considers residual value in computing the normal periodic depreciation?

Straight-line

MACRS

Double-declining-balance

All of these

6.A machine was purchased for $60,000. It has a useful life of 5 years and a residual value of $6,000. Under the straight-line method, what is annual depreciation expense?

$10,800

$11,000

$12,000

$13,200

7.Equipment was purchased for $18,000. It has a useful life of 5 years and a residual value of $2,000. What is depreciation expense for year one under the double-declining-balance method?

$3,200

$3,600

$6,400

$7,200

8.Goodwill is

amortized similar to other intangibles.

only written down if an impairment in value occurs.

charged to expense immediately.

amortized over 40 years or its economic life, whichever is shorter.

9.NBC Company purchased a patent from ABC for $144,000. At the time of purchase the patent had been in existence for 10 years. What is the first year's amortization?

$7,200

$12,000

$14,400

$18,000

10.Fixed assets are ordinarily presented in the balance sheet

at current market values.

at replacement costs.

at cost less accumulated depreciation

in a separate section along with intangible assets.

Reference no: EM13482092

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