Question
1. On January 2, 2019, Kellogg Corporation acquired equipment for $400,000. The estimated life of the equipment is 5 years or 50,000 hours. The estimated
1. On January 2, 2019, Kellogg Corporation acquired equipment for $400,000. The estimated life of the equipment is 5 years or 50,000 hours. The estimated residual value is $40,000. What is the book value of the asset on December 31, 2020, if Kellogg Corporation uses the straightline method of depreciation? (Round any intermediary calculations to two decimal places and your final answer to the nearest dollar.)
A.$328,000
B.$256,000
C.$400,000
D.$ 360,000
2. Lorenzo Corporation purchased equipment on January 1, 2019, for $200,000. The equipment had an estimated useful life of 5 years and an estimated salvage value of $70,000. After using the equipment for 2 years, the company determined that the equipment could be used for an additional 6 years and have a salvage value of $3,000. Assuming Lorenzo Corporation uses straightline depreciation, compute depreciation expense for the year ending December 31, 2021. (Round your final answer to the nearest dollar.)
A.$52,000
B.$24,667
C.$24,167
D.$ 26,000
3. When inventory is shipped from the seller to the buyer with shipping terms of FOB destination:
A.the goods will be included in the inventory of the buyer while in transit.
B.the seller has title to the goods while they are in transit.
C.the buyer will pay the transportation costs associated with the purchase.
D.title passes from the seller to the buyer when the goods leave the seller's shipping dock.
4. On January 2, 2019, Konan Corporation acquired equipment for $300,000. The estimated life of the equipment is 5 years or 70,000 hours. The estimated residual value is $20,000. What is the balance in Accumulated Depreciation on December 31, 2020, if Konan Corporation uses the
doubledecliningbalance method of depreciation? (Round any intermediary calculations to two decimal places and your final answer to the nearest dollar.)
A.$112,000
B.$72,000
C.$192,000
D.$ 280,000
5. Tomasino's inventory records show the following data on January 31:
Beginning inventory Jan. 1 | 100 units at $6 per unit |
Jan. 10 purchase | 280 units at $11 per unit |
Jan. 22 purchase | 130 units at $12 per unit |
On January 31, 210 units are still on hand. What is the cost of the ending inventory on January 31 if Tomasino uses the FIFO method?
A.$2,440
B.$1,560
C.$1,810
D.$ 1,260
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