Reference no: EM133096461
Questions -
Q1) Computer equipment was acquired at the beginning of the year at a cost of $58,616.00. The computer equipment has an estimated residual value of $3,922.00 and an estimated useful life of 5 years. Determine the 2nd year's depreciation using straight-line depreciation.
$21,877.60
$12,507.60
$11,723.20
$10,938.80
Q2) Which of the following is included in the cost of land?
outdoor parking lot lighting attached to the land
cost of paving a parking lot
fences on the land
brokerage commission
Q3) The method of determining depreciation that yields successive reductions in the periodic depreciation charge over the estimated life of the asset is the
units-of-production method
time-valuation method
double-declining-balance method
straight-line method
Q4) Xtra Company purchased a business from Argus for $96,000 above the fair value of its net assets. Argus had developed the goodwill over 12 years. How much would Xtra amortize the goodwill for its first year?
not enough information to calculate amortization
goodwill is not amortized
$7,000
$8,000
Q5) On December 31, Strike Company has decided to discard one of its batting cages. The equipment had an initial cost of $310,000 and has accumulated depreciation of $260,000. Depreciation has been recorded up to the end of the year. Which of the following will be included in the entry to record the disposal?
Equipment, credit, $310,000
Loss on Disposal of Asset; debit, $260,000
Gain on Disposal of Asset, credit, $50,000
Accumulated Depreciation, debit, $310,000
Q6) A fixed asset with a cost of $33,007 and accumulated depreciation of $29,706 is traded for a similar asset priced at $66,103 (fair market value) in a transaction with commercial substance. Assuming a trade-in allowance of $5,907, the cost basis of the new asset is
$63,497
$66,103
$69,404
$60,196
Q7) A new machine with a purchase price of $109,000, with transportation costs of $12,000, installation costs of $5,000, and special acquisition fees of $6,000, would have a cost basis of
$126,000
$121,000
$132,000
$114,000
Q8) The journal entry for recording payment for the short-term lease of a fixed asset would
debit the fixed asset and credit Cash
debit a liability and credit Cash
debit Rent Expense and credit Cash
be a memo entry only
Q9) Which of the following statements is true?
The fixed asset ratio is not useful for comparing different companies.
A larger fixed asset turnover ratio is associated with firms that are more labor intensive and require smaller fixed asset investments.
The fixed asset ratio cannot be compared across time for an individual company.
A smaller fixed asset turnover ratio is associated with firms that are more labor intensive and require smaller fixed asset investments.
Q10) A new machine with a purchase price of $83,548.00, with transportation costs of $9,413.00, installation costs of $5,641.00, and special acquisition fees of $1,894.00. Calculate a cost basis.
$83,548.00
$91,083.00
$100,496.00
$89,189.00