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.