Reference no: EM132518467

Question 1: The company purchased a building, parking lot, and land. The company paid in cash a total amount of $ 100,000. The estimated fair value of building is $ 62,000, land is $ 45,000, and the car park is $ 18,000. The land must be registered in the company's record at:

a. $ 100,000

b. $ 36,000

c. $ 42,000

d. $ 45,000

Question 2: Mansour Company purchased a machine for $ 80,000 on March 1, 2020. The company paid $ 4,600 for freight and $ 1,000 for insurance during shipping. Upon arrival, the company spent $ 5,000 to assemble and install the machines and another $ 400 to test and adjust the machines for operations. What is the acquisition cost of machines?

a. 80,000 dollars

b. 85,000 dollars

c. 89,000 dollars

d. 91,000 dollars

Question 3: A company purchased a machine with a total cost of $ 190,000, estimated useful life of 8 years and residual value of $ 10,000. It is estimated that the machine can produce 750,000 units over its useful life. In the first year, 105,000 units were produced. In the second year, 109,000 units were produced. Using the units of production method, what will be the depreciation expense that must be recorded at the end of the first year?

a. $25,200

b. $26,160

c. $26,660

d. $27,613

e. $53,160

Question 4: On the 5th January of the current year, the company purchased an equipment at a cost of $ 240,000 with estimated useful life of four years and estimated total production of 60,000 units. Assuming that the residual value is $ 60,000 and 15,000 units were produced during this year, the depreciation expense for the current year is:

a. 45,000$

b. 50,000$

c. 54,000$

d. 60,000$

Question 5: The company discarded an equipment that cost $8,000. The accumulated depreciation is $7,200 on the date of disposal. The company must recognize:

a. No gain or loss

b. Loss of $800

c. Gain of $800

d. Loss of $8,000

Question 6: A machine with a cost of 100,000 was discarded after 7 years, before the end of its useful life, which was estimated by 10 years. This means that at the date of disposal:

a. The book value of the machine equals zero

b. Accumulated depreciation equal to cost of machine

c. No loss from disposal the machine

d. All answers are wrong

Question 7: Land improvements such as afforestation cannot be added to the cost of land and are recorded in a separate account from the land account

True

False

Question 8: According to the units of production method, the unit depreciation rate is calculated on the basis of the total estimated, not the actual production units

True

False

Question 9: The double-declining depreciation method allocates a low depreciation expense in the first years of the asset's useful life and a high depreciation expense in subsequent years

True

False

Question 10: The cost of the land includes the purchase price, commissions, costs for removing an old building, and transfer fees

True

False