Reference no: EM133307261

1. Company B had three types of vehicles. Vehicle 1 had a cost of $35,000, salvage value of $8,000, and useful life of 6 years. Vehicle 2 had a cost of $58,000, salvage value of $3,000 and useful life of 10 years. Vehicle 3 had a cost of $19,500, salvage value of $1,500, and useful life of 4 years. What is the composite depreciation rate?

20%

14.5%

12.9%

13.3%

2. Company X purchased equipment for $40,000 with a salvage value of $5,000 and useful life of 4 years. The equipment has been depreciated for three years. At the beginning of the fourth year, the company determined that the salvage value is $3,000 and the useful life is 5 years. What is the depreciation expense in year 4?

$5,375

$2,150

$8,750

$7,400

3. Which of the following is true?

Restoration of impairment loss for an asset held for use is possible

Restoration of impairment loss is not possible under GAAP under any circumstances

Restoration of impairment loss for an asset to be disposed of is possible

Restoration of impairment loss is possible for both an asset to be disposed of and an asset held for use

4. Company Z acquired a mine to extract silver for $500,000. Development costs totaled $140,000. Extraction costs totaled $50,000. The mine can be sold for $90,000. The company estimates that 120,000 ounces of silver can be extracted. Compute the depletion cost per ounce.

$3.42

$6.75

$5.00

$4.17

15. Assume the following information: Sales $33,000; Beginning of year assets $120,000; End of year assets $123,500; Net income $18,500. Calculate the company's return on assets.

0.152

0.150

0.267

0.271