1.A used machine with a purchase price of $85 000, requiring an overhaul costing $8 000, installation costs of $4 000 and testing costs of $2 000, would have a cost basis of:

Select one:

a. $99 000.

b. $97 000.

c. None of the options

d. $85 000.

e. $93 000.

2.Which of the following would be included in property, plant and equipment?

i. Land

ii.Buildings

iii.Machinery

iv.Inventory

Select one:

a. i, ii, iii and iv

b. i, ii and iv only

c. i, ii and iii only

d. i only

e. i and ii only

3.Which of the following would NOT be capitalised into the cost of a new factory when construction finished on 1 July 2029?

Select one:

a. Insurance during construction of the factory

b. Excavation costs

c. Building insurance starting 1 July 2029

d. Installation costs

e. Demolition of old factory on the site where the factory is to be built

4.When a company discards machinery that is fully depreciated, with which of the following entries will the transaction be recorded?

Select one:

a. DR Accumulated depreciationCR Cash

b. DR CashCR Accumulated depreciation

c. DR MachineryCR Accumulated depreciation

d. DR Accumulated depreciationCR Machinery

e. DR Depreciation expenseCR Accumulated depreciation

5.A machine that cost $13,000 and on which $9,300 of accumulated depreciation had been recorded was disposed of for $3,700. The entry to record the disposal of the machine is:

Select one:

a. Dr Cash 9,300Cr Machinery9,300

b. Dr Cash3,700 Dr Accumulated DepreciationMachinery9,300Cr Gain on Sale of Machinery 3,700DrMachinery 9,300

c. Dr Accumulated DepreciationMachinery9,300Cr Machinery9,300

d. Dr Cash3,700 Dr Accumulated DepreciationMachinery9,300Cr Machinery13,000

e. Dr Machinery13,000Cr Depreciation ExpenseMachinery13,000

6.A truck that cost $24,000 and on which $18,000 of accumulated depreciation has been recorded was disposed of on January 1. Assume that the truck was disposed of for $4,000 cash. The entry to record this event would include

Select one:

a. None of the options.

b. a debit to Cash.

c. All of the options.

d. a debit to Loss on Sale of Truck.

e. a debit to Accumulated Depreciation.