Reference no: EM133089259
Questions -
Q1. Ken Corporation acquired equipment on January 1, 20X0, for $600,000, with an estimated useful life of 10 years and an estimated salvage value of $50,000. On January 1, 20X3, Ken Corporation revised the salvage value to $15,000 and revised the useful life to 9 additional years (12 years in total). What is depreciation expense for the year ending December 31, 20X3 if Ken Corporation uses straight-line depreciation?
A. $35,000.
B. $36,250.
C. $45,556.
D. $46,667.
E. $48,333.
Q2. The manufacturing capacity of Wong Company's facilities is 30,000 units of product a year. A summary of operating results for the year ending December 31, 20X8 is as follows: Sales (18,000 units @ $100) = $1,800,000; Variable manufacturing and selling costs = 990,000; Contribution margin = $810,000; Fixed costs = 495,000; Operating income = $315,000. A foreign distributor has offered to buy 15,000 units at $90 per unit during 20X9. Assume that all of Wong's costs would be at the same levels and rates in 29X9 as in 20X8. If Wong accepted this offer and rejected some business from regular customers so as not to exceed capacity, what would be the total operating income for 20X9?
A. $525,000.
B. $705,000.
C. $840,000.
D. $855,000.
E. None of the above.
Q3. Assume the following for the King Company: Sales (10,000 units) = $400,000; Fixed expenses = $105,000; Break-even point = $350,000. If sales price increased 10% and variable expenses increased $2.00 per unit, which of the following is true?
A. The new break-even point is 9,000 units.
B. The new selling price is $36.00 per unit.
C. The new variable expenses are $26.00 per unit.
D. The new break-even point is $330,000.
E. None of the above.
Q4. Greg Company accounts for its 40% investment in Paulus Corporation under the equity method of accounting. The investment was made on January 1, 20X2, at a cost of $710,000. Paulus reported net income of $400,000 for the year ended December 31, 20X2, and paid total dividends of $180,000 during 20X2. On December 31, 20X2, after making all appropriate entries, the balance in Greg Company's Investment in Paulus account will equal
A. $930,000.
B. $870,000.
C. $798,000.
D. $690,000.
E. $638,000.
Q5. The equity accounts of Jordan Company total $2,000,000. On 1/1/X1, Davidson Company purchased 60% of Jordan for $1,985,000. The fair values of net assets are equal to book values. What are goodwill and non-controlling interests amounts?
A. $695,000 and $150,000.
B. $695,000 and $800,000.
C. $785,000 and $800,000.
D. $1,308,333 and $1,323,333.
E. $1,348,333 and $1,333,333.