1.On January 1, 20x1 Buckle Co. purchased a machine that had a list price of 46,320. Buckle Co. paid cash of 18,000 and executed a one-year non-interest-bearing note for the balance. The going rate of interest was 18%. The machine has a 6-year life and no residual value. Depreciation expense on the SYD basis at the end of 20x1 is:

1. 8,092
2. 12,000
3. 13,234
4. 14,690

The next four items are based on the following information:

Dirt Corporation schedule of depreciable assets at December 31, 20X7 was as follows:

Asset

Cost

Accum. Depreciation

Acquisition date

Residual value

A

100,000

64,000

20X6

20,000

B

55,000

36,000

20X5

10,000

C

70,000

33,600

20X5

14,000

Dirt takes a full year's depreciation expense in the year of an asset's acquisition, and no depreciation expense in the year of an asset's disposition. The estimated useful life of each depreciable asset is 5 years.

2.Dirt depreciates asset A on the double-declining-balance method. How much depreciation expense should Dirt record in 20X8 for asset A?

a.32,000

b.25,600

c.14,400

d.6,400

3.Dirt depreciates asset A on the double-declining-balance method. How much depreciation expense should Dirt record in 20X9 for asset A?

a. 2,000

b. 5,600

c. 1,600

d. 8,640

4.Using the same depreciation method as used in 20X5, 20X6, and 20X7, how much depreciation expense should Dirt record in 20X8 for asset B?

a.6,000

b.9,000

c.11,000

d.12,000

5.Dirt depreciates asset C by the straight-line method. On June 30, 20X8, Dirt sold asset C for 28,000 cash. How much gain (loss) should Dirt record in 2008 on the disposal of asset C?

a.2,800

b.(2,800)

c.(5,600)

d.(8,400)

6.Enter Sandman Co. purchased manufacturing equipment from Sad But True Co. on January 1, 20x8 at a total cost of 9,000,000. Enter Sandman uses the straight-line method of depreciation and estimates that the equipment has a useful life of 10 years. On July 1, 20x8 and July 1, 20x9 Enter Sandman performed major regular inspections on the equipment costing 380,000 and 425,000, respectively.The costs of inspection satisfied the recognition criteria for capitalization.How much is the carrying amount of the equipment on December 31, 2009?

1. 7,920,000
2. 7,875,000
3. 7,529,412
4. 7,600,000

7.Tonyo Company uses the composite method of depreciation and has a composite rate of 25%. During 20x1, it sold assets with an original cost of 100,000 (residual value of 20,000) for 80,000 and acquired 60,000 worth of new assets (residual value of 10,000). The original group of assets had the following characteristics:

Total Cost250,000

Total Residual Value30,000

The above original group includes the assets sold in 20x8 but not the assets purchased in 20x8. How much is the depreciation in 20x8?

1. 62,500
2. 52,500
3. 47,500
4. 46,500

Use the following information for the next four items:

Light Company bought a machine for 300,000 on January 1, 20x8. The machine's useful life is 10 years and it is estimated to have a zero residual value and is depreciated using the straight-line method.

The revalued amount of the machine is as follows:

December 31Fair values of the machine

20x8 360,000

20x9335,000

2x10320,000

The enacted tax rate was 30% for each year

8.The revaluation surplus in the equity section of Light Company'sDecember 31, 20x8 statement of financial position is

a. 60,000

b. 90,000

c. 39,000

d. 63,000

9.The amount of depreciation expense to be recognized in 20x9 is

a. 32,500

b. 36,000

c. 40,000

d. 42,500

10.The amount ofrevaluation surplus transferred to retained earnings in 20x9 is

a.6,667

b.7,000

c.4,333

d. 10,000

11.The revaluation surplus in the equity section of LightCompany's December 31, 2x10 statement of financial position is

a.77,000

b. 110,000

c. 123,443

d. 109,500

Use the following information for the next four items:

Information on Mix Co.'s equipment on June 30, 20x8 is shown below:

Equipment (at cost)500,000

Accumulated depreciation150,000

350,000

The equipment consists of two machines, Machine A and Machine B. Machine A has a cost of 300,000 and a carrying amount of 180,000. Machine B has a cost of 200,000 and a carrying amount of 170,000. Both machines are measured using the cost model and depreciated on a straight line basis over a ten-year period.

On December 31, 20x8, Mix Co. decided to change from the cost model to the revaluation model. Information on this date follows:

Fair valuesRemaining useful life

Machine A180,0006 years

Machine B155,0005 years

On June 30, 20x9, Machine A and Machine B have fair values of 163,000 and 136,500, respectively, and remaining useful lives of 5 years and 4 years, respectively. The tax rate is 30%.

12.How much is the depreciation expense for the fiscal year ended June 30, 20x9?

1. 59,900
2. 55,500
3. 50,000
4. 67,000

13.How much is the revaluation surplus on December 31, 20x8?

1. 10,500
2. (15,000)
3. (10,500)
4. 7,000

14.How much is the carrying amount of the equipment on June 30, 20x9?

1. 163,000
2. 335,000
3. 300,000
4. 299,500

15.Entity A has identified indications that its plant is impaired. The plant has a carrying amount of 56,000,000. An independent valuer determined the following:

Replacement cost of the plant 90,000,000

Actual life15 years

Effective life 25 years

Remaining economic life 20 years

Entity A's tax rate is 30%.

How much is the revaluation surplus, net of tax?

a.16,000,000

b.11,200,000

c.18,250,000

d.12,775,000