1. The current portion of long-term debt should

a.be paid immediately

b.be reclassified as a current liability

c.be classified as a long-term liability

d.not be separated from the long-term portion of debt on the balance sheet

2.

If a fixed asset, such as a computer, were purchased on January 1 for $2,237 with an estimated life of 7 years and a salvage or residual value of $113, the journal entry for monthly expense under straight-line depreciation is

a.

Account	Debit	Credit
Depreciation Expense	25.29
Accumulated Depreciation		25.29

b.

Account	Debit	Credit
Accumulated Depreciation	303.43
Depreciation Expense		303.43

c.

Account	Debit	Credit
Accumulated Depreciation	25.29
Depreciation Expense		25.29

d.

Account	Debit	Credit
Depreciation Expense	303.43
Accumulated Depreciation		303.43

3.

Which of the following is included in the cost of constructing a building?

a.cost of repairing vandalism damage during construction

b.cost of paving the parking lot

c.insurance costs during construction

d.cost of removing the demolished building existing on the land when it was purchased

4.

Taylor Bank lends Guarantee Company $90,000 on January 1. Guarantee Company signs a $90,000, 8%, 9-month, interest-bearing note. The entry made by Guarantee Company on January 1 to journalize the proceeds and issuance of the note is

a.

Account	Debit	Credit
Interest Expense	5,400
Cash	84,600
Notes Payable		90,000

b.

Account	Debit	Credit
Notes Payable	90,000
Interest Payable	2,700
Cash		90,000
Interest Expense		2,700

c.

Account	Debit	Credit
Cash	95,400
Interest Expense		5,400
Notes Payable		90,000

d.

Account	Debit	Credit
Cash	90,000
Notes Payable		90,000

5.

A machine with a cost of $68,000 has an estimated residual value of $4,765 and an estimated life of 5 years or 19,114 hours. What is the amount of depreciation for the second full year, using the double-declining-balance method?

a.$27,200.00

b.$13,600.00

c.$25,294.00

d.$16,320.00

6.

Research and Development Costs would usually appear on the financial statements as a(n)

a.current asset on the balance sheet

b.an intangible asset on the balance sheet

c.fixed asset on the balance sheet

d.expense on the income statement

7.

Equipment with a cost of $85,413, an estimated residual value of $5,373, and an estimated life of 11 years was depreciated by the straight-line method for 4 years. Due to obsolescence, it was determined that the remaining useful life should be shortened by 4 years and the residual value changed to zero. The depreciation expense for the current and future years is

a.$5,118.87

b.$29,105.45

c.$7,038.44

d.$18,769.18

8.

Thomas Martin receives an hourly wage rate of $40, with time and a half for all hours worked in excess of 40 hours during a week. Payroll data for the current week are as follows: hours worked, 48; federal income tax withheld, $350; social security tax rate, 6.0%; and Medicare tax rate, 1.5%. What is the gross pay for Martin?

a.$449

b.$2,080

c.$1,574

d.$1,730

9.

A fixed asset with a cost of $28,178 and accumulated depreciation of $25,360 is traded for a similar asset priced at $54,566 (fair market value) in a transaction with commercial substance. Assuming a trade-in allowance of $4,272, at what cost will the new equipment be recorded in the books?

a.$54,566

b.$53,112

c.$50,294

d.$57,384