1.On July 1, 2020, Bramble Corporation purchased factory equipment for $288000. Salvage value was estimated to be $8000. The equipment will be depreciated over five years using the double-declining balance method. Counting the year of acquisition as one-half year, Bramble should record depreciation expense for 2021 on this equipment of

$92160.

$115200.

$59200.

$69120.

2. On May 1, 2020, Waterway Industries began construction of a building. Expenditures of $622800 were incurred monthly for 5 months beginning on May 1. The building was completed and ready for occupancy on September 1, 2020. For the purpose of determining the amount of interest cost to be capitalized, the weighted-average accumulated expenditures on the building during 2020 were

$519000.

$3114000.

$622800.

$2491200.

3. On January 2, 2018, Concord Corporation acquired equipment to be used in its manufacturing operations. The equipment has an estimated useful life of 10 years and an estimated salvage value of $47900. The depreciation applicable to this equipment was $212100 for 2021, computed under the sum-of-the-years'-digits method. What was the acquisition cost of the equipment?

$1714400

$1666500

$1618600

$2121000

4. During 2020, Bonita Industries constructed assets costing $3920000. The weighted-average accumulated expenditures on these assets during 2020 was $2370000. To help pay for construction, $1760000 was borrowed at 10% on January 1, 2020, and funds not needed for construction were temporarily invested in short-term securities, yielding $36000 in interest revenue. Other than the construction funds borrowed, the only other debt outstanding during the year was a $2070000, 10-year, 9% note payable dated January 1, 2014. What is the amount of interest that should be capitalized by Bonita during 2020?

$352800.

$237000.

$230900.

$118500.

5. Sheridan Company, which has a calendar year accounting period, purchased a new machine for $84600 on April 1, 2016. At that time Sheridan expected to use the machine for nine years and then sell it for $8460. The machine was sold for $47000 on Sept. 30, 2021. Assuming straight-line depreciation, no depreciation in the year of acquisition, and a full year of depreciation in the year of retirement, the gain to be recognized at the time of sale would be

$4700.

$8460.

$6700.

$0.

6. During 2020, Vaughn Manufacturing sold equipment that had cost $399000 for $234800. This resulted in a gain of $17500. The balance in Accumulated DepreciationEquipment was $1310000 on January 1, 2020, and $1250000 on December 31. No other equipment was disposed of during 2020. Depreciation expense for 2020 was

$121700.

$77500.

$60000.

$217300.

7. Confectioners, a chain of candy stores, purchases its candy in bulk from its suppliers. For a recent shipment, the company paid $3700 and received 6500 pieces of candy that are allocated among three groups. Group 1 consists of 1930 pieces that are expected to sell for $0.15 each. Group 2 consists of 4360 pieces that are expected to sell for $0.42 each. Group 3 consists of 210 pieces that are expected to sell for $0.78 each. Using the relative sales value method, what is the cost per item in Group 1?

$1.26.

$0.68.

$0.57.

$0.24.

8. Coronado Industries is constructing a building. Construction began on January 1 and was completed on December 31. Expenditures were $6450000 on March 1, $5250000 on June 1, and $8550000 on December 31. Coronado Industries borrowed $3250000 on January 1 on a 5-year, 12% note to help finance construction of the building. In addition, the company had outstanding all year a 10%, 3-year, $6370000 note payable and an 11%, 4-year, $12750000 note payable.

What is the avoidable interest for Coronado Industries?

$943506

$390000

$1247056

$442968

9. During the current fiscal year, Sandhill Corp. signed a long-term noncancellable purchase commitment with its primary supplier. Sandhill agreed to purchase $2.16 million of raw materials during the next fiscal year under this contract. At the end of the current fiscal year, the raw material to be purchased under this contract had a market value of $1.68 million. What is the journal entry at the end of the current fiscal year?

Debit Unrealized Holding Gain or Loss for $1680000 and credit Estimated Liability on Purchase Commitments for $1680000.

No journal entry is required.

Debit Unrealized Holding Gain or Loss for $480000 and credit Estimated Liability on Purchase Commitment for $480000.

Debit Estimated liability on Purchase Commitments for $480000 and credit Unrealized Holding Gain or Loss for $480000.

10. During the prior fiscal year, Cullumber Corp. signed a long-term noncancellable purchase commitment with its primary supplier to purchase $2.02 million of raw materials. Cullumber paid the $2.02 million to acquire the raw materials when the raw materials were only worth $1.61 million. Assume that the purchase commitment was properly recorded. What is the journal entry to record the purchase?

Debit Inventory for $2020000, and credit Cash for $2020000.

Debit Inventory for $1610000, debit Unrealized Holding Gain or Loss for $410000, and credit Cash for $2020000.

Debit Inventory for $1610000, and credit Cash for $1610000.

Debit Inventory for $1610000, debit Estimated Liability on Purchase Commitments for $410000 and credit Cash for $2020000.