1. SMJ Corp purchased a group of assets for $355,000. The assets and their relative market values are as follows:

Land 144,000

Equipment96,000

Building240,000

Which amount would be debited to the Land account?

a.144,000

b. 380,000

c.106,500

d.131,500

2. SMJ Corp purchased a work truck on1/1/25 for 200,000. The estimated life of the truck was 5 years and its estimated residual value was $40,000. SMJ Corp uses straight line depreciation. Calculate the book value of the work truck at the end of 2025.

a. 168,000

b. 128,000

c.186,00

d.160,000

3. ERAU Inc has a machine that cost $150,000. Accumulated depreciation is $120,000. The machine was sold for $25,000. The amount of the gain or loss from this sale is:

a.a loss of $30,000

b. a gain of $30,000

c.a loss of $5,000

d.a gain of $5,000

4. SMJ Corp purchased a machine on1/1/25 for 1,000,000. The estimated life of the machine was 5 years and its estimated residual value was $160,000. SMJ Corp uses straight line depreciation. Calculate the depreciation expense per year using the straight-line depreciation method:

a. 178,000

b. 128,000

c.168,00

d.160,000

5. A truck costs $320,000 and is expected to be driven 110,000 during its 5 year life. Residual value is expected to be zero. If the truck is driven 30,000 miles in the first year, how much depreciation will be recorded under the units of production method at the end of the first year?

a. 30,300

b. 87,273

c.90,732

d.89,250

6. On 1/1/24 SMJ Inc purchased a machine for $320,000. Management expects to use the machine for 30,000 hours over the next 6 years. Residual value of the machine at the end of year 6 is $41,000. The machine was used for 4,200 hours in 2024 and 5,400 hours in 2025. What is the depreciation expense in 2024 if the company uses the units of production method of depreciation?

a. 30,300

b. 42,095

c.40,250

d.39,060

7. On 1/1/24 SMJ Inc had total assets of $363,000. During the year the company purchased new machinery worth $82,000 and promised to pay the amount due in two years. Throughout the year, SMJ earned revenue of $54,000 every month. Calculate the asset turnover ratio.

a.1.82 times

b. 1.46 times

c.1.6 times

d.1.1 times

8. A coal mine cost $1,010,000 and is estimated to hold 60,000 tons of coal. There is no residual value. During the first year of operations, 10,000 tons of coal are extracted and sold. Calculate depletion expense for the first year.

a.188,100

b. 168,333

c.151,350

d.201,800

9. The cost of an asset is 1,200,000 and its residual value is 250,000. Estimated useful life of the asset is 5 years. Calculate depreciation for the first year using the double-declining balance

method of depreciation.

a.384,000

b. 476,000

c.480,000

d.292,000

10. SMJ Services sells travel insurance policies. The price for each policy is $100 and is paid in advance. During April of the current year, 10 travel insurance policies were sold for cash. The journal entry would be:

a. Unearned revenue1,000

Service revenue1,000

b. Cash1,000

Service revenue1,000

c. Cash1,000

Unearned revenue1,000

d. Unearned revenue1,000

Cash1,000

11. A coal mine cost $1,010,000 and is estimated to hold 60,000 tons of coal. There is no residual value. During the first year of operations, 10,000 tons of coal are extracted and sold. Calculate depletion per unit.

a.16.83

b. 17.68

c.13.26

d.14.42

12. SMJ Inc purchased land to build an office building. In the first quarter, the following amounts were incurred:

Acquisition of land44,000

Architectural fees5,200

Lawn sprinkler system3,000

Surveys & legal fees2,400

Land clearing3,600

Contractor charges for building60,000

Fencing8,900

Material & labor cost for building395,000

Install lighting & signage1,700

Parking lot 2,700

What amount should be recorded as the cost of the building on SMJs books?

a.515,900

b. 464,000

c.452,200

d.460,200