1. A used machine with a purchase price of $30,888.00, requiring an overhaul costing $9,109.00, installation costs of $4,854.00, and special acquisition fees of $5,262.00, would have a cost basis of

Select the correct answer:

$39,997.00

$30,888.00

$69,338.00

$50,113.00

2. A machine costing $58,715 with a 5-year life and $53,545 depreciable cost was purchased January 1. Compute the yearly depreciation expense using straight-line depreciation. Round your answer to the nearest whole dollar.

$__________ per year

3. On December 31, Strike Company has decided to sell one of its batting cages. The initial cost of the equipment was $280,067.00 with an accumulated depreciation of $266,063.65. Depreciation has been taken up to the end of the year. The company found a company that is willing to buy the equipment for $32,207.71. What is the amount of the gain or loss on this transaction?

Select the correct answer:

Gain of $18,204.36

Cannot be determined

Gain of $32,207.71

Loss of $18,204.36

4. A fixed asset with a cost of $51,274.00 and accumulated depreciation of $43,582.90 is traded for a similar asset priced at $50,900.00. Assuming a trade-in allowance of $4,565.00, the recognized loss on the trade is

5. Equipment with a cost of $80,978.00, an estimated residual value of $6,296.00, and an estimated life of 13 years was depreciated by the straight-line method for 6 years. Due to obsolescence, it was determined that the remaining useful life should be shortened by 3 years and the residual value changed to zero. The depreciation expense for the current and future years is

6. A new machine with a purchase price of $80,437.00, with transportation costs of $9,269.00, installation costs of $5,754.00, and special acquisition fees of $1,587.00. Calculate a cost basis.

7. On December 31, Strike Company has decided to trade-in one of its batting cages for another one that has a cost of $596,165.00. The seller of the batting cage is willing to allow a trade-in amount of $31,823.15. The initial cost of the old equipment was $235,727.00 with an accumulated depreciation of $200,367.95. Depreciation has been taken up to the end of the year. The difference will be paid in cash. What is the amount of the gain or loss in a transaction with commercial substance?

Select the correct answer.

Gain of $31,823.15

Gain of $3,535.90

Loss of $3,535.90

Loss of $31,823.15

8. A building with an appraisal value of $135,465.00 is made available at an offer price of $155,188.00. The purchaser acquires the property for $37,243.00 in cash, a 90-day note payable for $26,384.00, and a mortgage amounting to $54,320.00. What is the cost basis recorded in the buyer's accounting records to recognize this purchase?

Select the correct answer.

$135,465.00

$117,947.00

$155,188.00

$117,945.00

9. On December 31, Strike Company has decided to discard one of its batting cages. The initial cost of the equipment was $246,765.00 with an accumulated depreciation of $222,088.50. Depreciation has been taken up to the end of the year. The following will be included in the entry to record the disposal.

Select the correct answer.

Loss on Disposal of Asset Dr. $222,088.50

Accumulated Depreciation Dr. $246,765.00

Gain on Disposal of Asset Cr. $24,676.50

Equipment Cr. $246,765.00