- Description
ACC 291T Wk 5 – Apply: Connect Homework (2021.7 New)
Mohr Company purchases a machine at the beginning of the year at a cost of $43,000. The machine is depreciated using the straight-line method. The machine’s useful life is estimated to be 5 years with a $7,000 salvage value. The book value of the machine at the end of year 2 is:
Multiple Choice
$36,000.
$28,600.
$7,200.
$21,600.
$14,400.
A company had a tractor destroyed by fire. The tractor originally cost $143,000 with accumulated depreciation of $76,200. The proceeds from the insurance company were $38,000. The company should recognize:
Multiple Choice
A loss of $66,800.
A loss of $28,800.
A gain of $28,800.
A gain of $66,800.
A gain of $38,000.
Merchant Company purchased property for a building site. The costs associated with the property were:
Purchase price $ 189,000
Real estate commissions 16,400
Legal fees 2,200
Expenses of clearing the land 3,400
Expenses to remove old building 2,400
________________________________________
What portion of these costs should be allocated to the cost of the land and what portion should be allocated to the cost of the new building?
Multiple Choice
$207,600 to Land; $2,400 to Building.
$213,400 to Land; $0 to Building.
$191,200 to Land; $24,400 to Building.
$211,000 to Land; $0 to Building.
Martin Company purchases a machine at the beginning of the year at a cost of $70,000. The machine is depreciated using the double-declining-balance method. The machine’s useful life is estimated to be 4 years with a $5,800 salvage value. The machine’s book value at the end of year 3 is:
Multiple Choice
$8,750.
$52,500.
$61,250.
$8,013.
$35,000.
An asset’s book value is $32,400 on January 1, Year 6. The asset is being depreciated $450 per month using the straight-line method. Assuming the asset is sold on July 1, Year 7 for $23,800, the company should record:
Multiple Choice
Neither a gain or loss is recognized on this type of transaction.
A gain on sale of $500.
A loss on sale of $500.
A loss on sale of $250.
A gain on sale of $250.
An asset’s book value is $19,600 on December 31, Year 5. The asset has been depreciated at an annual rate of $4,600 on the straight-line method. Assuming the asset is sold on December 31, Year 5 for $16,600, the company should record:
Multiple Choice
Neither a gain nor a loss is recognized on this type of transaction.
A loss on sale of $3,000.
A loss on sale of $3,900.
A gain on sale of $3,900.
A gain on sale of $3,000.
Gaston owns equipment that cost $17,000 with accumulated depreciation of $3,400. Gaston sells the equipment for $12,200. Which of the following would not be part of the journal entry to record the disposal of the equipment?
Multiple Choice
Credit Gain on Disposal of Equipment $1,400.
Debit Cash $12,200.
Debit Accumulated Depreciation $3,400.
Credit Equipment $17,000.
Debit Loss on Disposal of Equipment $1,400.
Marlow Company purchased a point of sale system on January 1 for $6,900. This system has a useful life of 10 years and a salvage value of $1,150. What would be the depreciation expense for the second year of its useful life using the double-declining-balance method?
Multiple Choice
$1,104.
$575.
$1,040.
$1,150.
$1,380.
Wickland Company installs a manufacturing machine in its production facility at the beginning of the year at a cost of $101,000. The machine’s useful life is estimated to be 10 years, or 340,000 units of product, with a $9,000 salvage value. During its second year, the machine produces 27,200 units of product. Determine the machines’ second year depreciation under the straight-line method.
Multiple Choice
$11,000.
$9,200.
$10,100.
$7,360.
$8,080.
Mohr Company purchases a machine at the beginning of the year at a cost of $44,000. The machine is depreciated using the double-declining-balance method. The machine’s useful life is estimated to be 8 years with a $3,000 salvage value. Depreciation expense in year 2 is:
Multiple Choice
$8,250.
$5,500.
$11,000.
$33,000.
$10,250.