Answer the following questions:
Question 1
Erin Danielle Company purchased equipment and incurred the following costs.
Cash price$24,000
Sales taxes1,200
Insurance during transit200
Installation and testing400
Total costs$25,800
What amount should be recorded as the cost of the equipment?
Question 2
Depreciation is a process of:
Question 3
Micah Bartlett Company purchased equipment on January 1, 2010, at a total invoice cost of $400,000. The equipment has an estimated salvage value of $10,000 and an estimated useful life of 5 years. The amount of accumulated depreciation at December 31, 2011, if the straight-line method of depreciation is used, is:
Question 4
Ann Torbert purchased a truck for $11,000 on January 1, 2010. The truck will have an estimated salvage value of $1,000 at the end of 5 years. Using the units-of-activity method, the balance in accumulated depreciation at December 31, 2011, can be computed by the following formula:
Question 5
Jefferson Company purchased a piece of equipment on January 1, 2011. The equipment cost $60,000 and had an estimated life of 8 years and a salvage value of $8,000. What was the depreciation expense for the asset for 2012 under the double-declining-balance method?
Question 6
When there is a change in estimated depreciation:
Question 7
Able Towing Company purchased a tow truck for $60,000 on January 1, 2011. It was originally depreciated on a straight-line basis over 10 years with an assumed salvage value of $12,000. On December 31, 2013, before adjusting entries had been made, the company decided to change the remaining estimated life to 4 years (including 2013) and the salvage value to $2,000. What was the depreciation expense for 2013?
Question 8
Additions to plant assets are:
Question 9
Bennie Razor Company has decided to sell one of its old manufacturing machines on June 30, 2011. The machine was purchased for $80,000 on January 1, 2007, and was depreciated on a straight-line basis for 10 years assuming no salvage value. If the machine was sold for $26,000, what was the amount of the gain or loss recorded at the time of the sale?
Question 10
Maggie Sharrer Company expects to extract 20 million tons of coal from a mine that cost $12 million. If no salvage value is expected, and 2 million tons are mined and sold in the first year, the entry to record depletion will include a:
Question 11
Which of the following statements is false?
Question 12
Martha Beyerlein Company incurred $150,000 of research and development costs in its laboratory to develop a patent granted on January 2, 2011. On July 31, 2011, Beyerlein paid $35,000 for legal fees in a successful defense of the patent. The total amount debited to Patents through July 31, 2011, should be:
Question 13
Indicate which of the following statements is true.
Question 14
Lake Coffee Company reported net sales of $180,000, net income of $54,000, beginning total assets of $200,000, and ending total assets of $300,000. What was the company's asset turnover ratio?
Question 15
Schopenhauer Company exchanged an old machine, with a book value of $39,000 and a fair market value of $35,000, and paid $10,000 cash for a similar new machine. The transaction has commercial substance. At what amount should the machine acquired in the exchange be recorded on Schopenhauer's books?
Question 16
In exchanges of assets in which the exchange has commercial substance: