1. Computer equipment was acquired at the beginning of the year at a cost of $65,000 that has an estimated residual value of $3,000 and an estimated useful life of 5 years. Determine the 2nd years depreciation using straight-line depreciation. a. $26,000 b. $24,800 c. $12,400 d. $13,000 2/. Which of the following is true? a. If using the double-declining-balance the total amount of depreciation expense during the life of the asset will be the highest. b. If using the units-of-production method, it is possible to depreciate more than the depreciable cost. c. If using the straight line method, the amount of depreciation expense during the first year is higher than that of the double-declining-balance. d. Regardless of the depreciation method, the amount of total depreciation expense during the life of the asset will be the same. 3. You are trying to explain debit and credit memos that appear on bank statements and whether these will increase or decrease your companys bank account balance. Complete the following table to help your new staff understand. ITEM Debit or Credit Memo Increases or Decreases the Companys Bank Account Balance

Item Dr or Cr Increases or Decreases

EFT payment is dr DECREASES

Bank correction of an error due to posting another customers check to your account:

Cr INCREASES

Service Charge DR DE

Note collected for our company....CR IN

NSF check CR IN

Bank correction of an error recording a $520 deposit as $250: DR DE

EFT deposit CR IN

red text this is in the excel below

12. Equipment was acquired at the beginning of the year at a cost of $75,000. The equipment was depreciated using the straight-line method based upon an estimated useful life of 6 years and an estimated residual value of $7,500. a) What was the depreciation expense for the first year? b) Assuming the equipment was sold at the end of the second year for $59,000, determine the gain or loss on sale of the equipment. c) Journalize the entry to record the sale.

ANS:

A/ ($75,000-$7,500) / 6 = $11,250

B/ Loss $6500{59,000- [$75,000 (11,250 X 2)]}

C/

Cash ..................................................$59,000

Accumulated Depreciation- equipment..........$22,500

Equipment...............................................................$75,000

Loss on sale of equipment............................................$6,500