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What amount should real angus steakhouse record the land

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Reference no: EM133131398

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Q1. Real Angus Steakhouse purchased land for $75,000 cash. They also incurred commissions of $4,500, property taxes of $5,000, and title insurance of $800. The $5,000 in property taxes includes $4,000 in back taxes paid by Real Angus on behalf of the seller and $1,000 due for the current year after the purchase date. For what amount should Real Angus Steakhouse record the land?

A. $83,500.

B. $84,300.

C. $85.300.

D. $75,000.

Q2. Costello Company purchased a computer that cost $10,000. It had an estimated useful life of 5 years and no residual value. The computer was depreciated by the straight-line method and was sold at the end of the second year of use for $5,000 cash. Costello should record:

A. a loss of $1,000.

B. a gain of $1,000.

C. neither a gain nor a loss - the computer was sold at its book value

D. neither a gain nor a loss - the gain that occurred in this case would not be recognized.

Q3. What is the formula to compute the book value of an asset?

A. The fair value of the asset if the asset is sold.

B. The cost of the asset less its accumulated depreciation.

C. The cost of the asset minus the asset's residual value.

D. The cost at which the asset was purchased

Q4. Crestview Estates purchased a tractor on January 1, 2018, for $65,000. The tractor's useful life is estimated to be 10 years and has a residual value of $5,000. If Crestview uses the straight-line method of depreciation what is the amount of depreciation expense and the ending book value on December 31, 2018?

A. $6,500 depreciation expense and $58,500 book value

B. $6,000 depreciation expense and $54,000 book value

C. $6,500 depreciation expense and $65,000 book value

D. $6,000 depreciation expense and $59,000 book value

Q5. Crestview Estates purchased a tractor on January 1, 2018, for $65,000. The tractor's useful life is estimated to be 10 years and has a residual value of $5,000. If Crestview uses the double-declining balance method of depreciation what is the amount of depreciation expense that Crestview will record on December 31, 2018, the end of the first year?

A. $13,000

B. $12,000

C. $6,500

D. $6,000

Q6. Crestview Estates purchased a tractor on January 1, 2018, for $65,000. The tractor's useful life is estimated to be 10 years and has a residual value of $5,000. If Crestview uses the double-declining balance method of depreciation what is the amount of depreciation expense that Crestview will record on December 31, 2019, the end of the second year?

A. $10.400

B. $9,600

C. $12,000

D. $13,000

Q7. Crestview Estates purchased a tractor on January 1, 2018, for $65,000. The tractor's useful life is estimate to be 30,000 miles and has a residual value of $5,000. If Crestview used the tractor 10,000 miles in 2018, what is the depreciation expense at the end of 2018 using the activity-based method?

A. $25,000.

B. $23,333.

C. $21667.

D. $20.000.

Reference no: EM133131398

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