1) Which of the following is included in the cost of land?

A) The cost of fencing

B) The cost of paving

C) The cost of clearing the land

D) The cost of outdoor lighting

2) Which of the following is included in the cost of a plant asset?

A) Amounts paid to ready the asset for its intended use

B) Regular maintenance cost

C) Normal repair cost

D) Wages of workers who use the asset

3) A company purchased a used machine for $80,000. The machine required installation costs of $8,000 and insurance while in transit of $500. At which of the following amounts would the equipment be recorded?

A) $80,500

B) $88,500

C) $88,000

D) $80,000

4) Acme Investments plans to develop a shopping center. In the first quarter, they spent the following amounts:

Purchase land		$100,000
Surveys and legal fees		1,200
Land clearing		5,000
Install fences around the property		4,600
Install lighting and signage		2,600

What amount should be recorded as the land improvements cost?

A) $7,200

B) $101,200

C) $46,200

D) $106,200

5) On January 1, 2013, Zane Manufacturing Company purchased a machine for $40,000. The company expects to use the machine a total of 24,000 hours over the next 6 years. The estimated sales price of the machine at the end of 6 years is $4,000. The company used the machine 8,000 hours in 2013 and 12,000 in 2014.

What is depreciation expense for 2013 if the company uses double-declining-balance depreciation?

A) $6,667

B) $6,000

C) $13,333

D) $12,000

6) On January 1, 2013, Zane Manufacturing Company purchased a machine for $40,000. The company expects to use the machine a total of 24,000 hours over the next 6 years. The estimated sales price of the machine at the end of 6 years is $4,000. The company used the machine 8,000 hours in 2013 and 12,000 in 2014.

What is depreciation expense for 2013 if the company uses straight-line depreciation?

A) $6,667

B) $13,333

C) $12,000

D) $6,000

7) On January 1, 2013, Zane Manufacturing Company purchased a machine for $40,000. The company expects to use the machine a total of 24,000 hours over the next 6 years. The estimated sales price of the machine at the end of 6 years is $4,000. The company used the machine 8,000 hours in 2013 and 12,000 in 2014.

What is depreciation expense for 2013 if the company uses units-of-production depreciation?

A) $6,000

B) $13,333

C) $6,667

D) $12,000

8) Charterhouse Services purchased a van on January 1, 2012, for $56,000. It has an estimated life of 5 years, and an estimated salvage value of $6,000. Charterhouse uses straight-line depreciation. At the end of 2013, what was the book value of the asset?

A) $36,000

B) $30,000

C) $36,000

D) $12,000

9) A plant asset is sold for $1,000. The original cost was $9,000, salvage value was estimated at $200, and useful life was estimated at 12 years. At time of sale, accumulated depreciation was $8,500. The sale resulted in a gain of $500. (T/F)

10) An asset was purchased for $12,000. The asset's estimated useful life was 5 years, and its residual value was $2,000. Straight-line depreciation was used. How much gain or loss is reported if the asset is sold for $4,500 at the end of the third year?

A) $1,500 gain

B) $2,000 loss

C) No gain or loss

D) $1,500 loss