1.

The Cheat River Company is a coal company based in West Virginia. The company recently purchased a new coal truck for $54,000. The truck had an expected useful life of 200,000 miles and an expected salvage value of $4,000.

What is the depreciation expense using the units-of-production method assuming the truck travelled 40,000 miles on company business during the year?

Select one:

a. $10,000

b. $8,620

c. $12,200

d. $8,400

2.

Farm Equipment Company had goodwill valued at $170 million on its balance sheet at year-end. A review of the goodwill by the company's CFO indicated that the goodwill was impaired and was now only worth $100 million. How will the goodwill impairment appear on the Income Statement of the company?

Select one:

A. As an Impairment Loss of $100 million

B. As an Impairment Loss of $70 million

C. As an Impairment Loss of $20 million

D. None of the above

3.

On January 1, Tracey Company purchased equipment with an invoice cost of $237,600. The company paid 8% sales taxes on the invoice cost and an additional $1,000 to ship the equipment to the companys facilities. On January 15, the company hired an outside company to train its employees on the new equipment at a cost of $2,400.

How much is the capitalized cost of the equipment?

Select one:

a. $216,000

b. $260,008

c. $236,680

d. None of the above

4.

On January 1, Jenkins Corporation purchased 40% of the outstanding common stock of the Wells Corporation for $110,000. During the year, Wells Corporation reported net income of $40,000 and paid cash dividends of $20,000.

The balance of the Investment in the Wells Corporation account on the books of Jenkins Corporation at year-end is:

Select one:

a. $110,000

b. $118,000

c. $102,000

d. $126,000