1.Benson Company, acquired a machine that involved the following expenditures and related factors:

Gross invoice price	$38,000
Sales tax	1,425
Cash discount taken	570
Freight	675
Assembly of machine	900
Installation of machine	1,350
Assorted spare parts for future use	2,700
Tuning and adjusting machine before use	450

The initial accounting cost of the machine should be:

Select one:

A. $33,870

B. $42,230

C. $30,030

D. $32,730

E. None of the above

2. A land site for a new office building is purchased for $180,000. A barn on the site will be razed at a net cost of $17,000. The $17,000 razing expenditure is properly debited to:

Select one:

A. Office Building

B. Land

C. Razing Expense

D. Land Improvements

E. None of the above

3. Rodriquez Company purchased land and a building for a total price of $2,600,000. Individually, the land was appraised at $420,000 and the building at $2,380,000. How much should be recorded as the acquisition cost of each asset?

Select one:

A. Land, $420,000; building, $2,380,000

B. Land, $420,000; building, $2,180,000

C. Land, $390,000; building, $2,210,000

D. Land, $400,000; building, $2,200,000

E. None of the above

4.BTL Company purchased a tractor at a cost of $60,000 on January 1, 2013. The tractor has an estimated salvage value of $10,000 and an estimated life of 8 years. If BTL uses the straight-line method, what is the book value at January 1, 2017?

Select one:

A. $35,000

B. $25,000

C. $41,250

D. Some other answer

Which of the following estimates are required when calculating depreciation expense?

1.	Depreciation rate
2.	Useful life
3.	Expected maintenance costs
4.	Salvage value

Select one:

A. 1, 2, and 4

B. 1, 2, 3, and 4

C. 2 and 4

D. 2, 3, and 4

The purpose of depreciation accounting is to:

Select one:

A. Reflect changes in the current value of a plant asset over its useful life

B. Accumulate funds to replace a plant asset at the end of its useful life

C. Allocate a plant asset's cost, less its salvage value, to expense over the asset's useful life

D. Have a plant asset's book value equal its initial cost by the end of its useful life

E. None of the above

What is the term identifying the expected net recovery from the disposal of a plant asset at the end of its useful life?

Select one:

A. Accumulated depreciation

B. Salvage value

C. Depreciation expense

D. Market value

E. None of the above

On January 1, 2013, Williams Company purchased a bottle-capping machine for $80,000. During its useful life, the company expects that the machine will cap 1,500,000 bottles. The machine's expected salvage value is $5,000. During 2013, the machine capped 250,000 bottles and during 2014, the machine capped 300,000 bottles. Assuming units-of-production depreciation, 2014 depreciation expense is:

Select one:

A. $12,500

B. $13,333

C. $15,000

D. $16,000

E. None of the above

Which of the following depreciation methods most closely relates periodic depreciation expense to the periodic use of the asset?

Select one:

A. Straight line.

B. Units of production.

C. Double-declining balance

D. None of the above

The book value of a depreciable asset is:

Select one:

A. The original cost of the asset

B. The original cost of the asset less its accumulated depreciation

C. The original cost of the asset less its salvage value

D. The accumulated depreciation on the asset

E. None of the above

BTL Company purchased a tractor at a cost of $90,000. The tractor has an estimated salvage value of $10,000 and an estimated life of 8 years, or 12,000 hours of operation. The tractor was purchased on January 1, 2013 and was used 2,400 hours in 2013 and 2,200 hours in 2014.

What method of depreciation will produce the maximum depreciation expense in 2013?

Select one:

A. All methods produce the same expense in 2013

B. Units-of-production

C. Straight-line

D. Double-declining-balance

BTL Company purchased a tractor at a cost of $90,000. The tractor has an estimated salvage value of $10,000 and an estimated life of 8 years, or 12,000 hours of operation. The tractor was purchased on January 1, 2013 and was used 2,400 hours in 2013 and 2,200 hours in 2014. What amount will BTL Company report as depreciation expense over the 8 year life of the equipment using straight-line depreciation?

Select one:

A. $80,000

B. $90,000

C. $20,000

D. $12,500

Which of the following is a capital expenditure?

Select one:

A. Cost to add air conditioning to a company car

B. Cost to purchase three ashtrays for the company conference room

C. Cost to replace spark plug on company lawnmower

D. Cost to have store windows washed

E. None of the above

How should intangible assets be disclosed on the balance sheet?

Select one:

A. As a reduction of stockholders' equity

B. At the estimated market value at the balance sheet date

C. Net of the costs already amortized

D. At cost in the current assets section

At January 1, 2013, Crane Company had total assets of $900,000 and at December 31, 2013, its total assets were $1,100,000. Crane's net sales for 2013 were $850,000 and its 2013 net income was $55,000. Crane's return on assets for 2013 is:

Select one:

A. 5.5%

B. 5.0%

C. 6.5%

D. 85.0%

E. None of the above

An exclusive right, granted by the federal government for 20 years, to exclude others from making, using, or selling an invention is a:

Select one:

A. Franchise

B. Copyright

C. Patent

D. Leasehold

E. None of the above

Unless another amortization method is shown to be more appropriate, intangible assets are amortized using the:

Select one:

A. Straight-line method

B. Percentage depletion method

C. Double declining-balance method

D. Units-of-production methodResearch and development costs that relate to a firm's products and its production processes:

Select one:

A. Must be expensed when incurred

B. Are capitalized when the costs benefit future periods

C. May be expensed or capitalized at the discretion of the firm's management.

D. Must be capitalized and amortized over 40 years

E. None of the above

E. None of the above

Where are plant assets and intangible assets classified in a balance sheet?

Select one:

A. Between current assets and investments

B. Immediately before current assets

C. After current assets and investments

D. After long-term liabilities

E. None of the above