21. Percy, Inc. had net sales of $1,530,000 during 2019. On January 1, 2019. Percy's accounts receivable were $320,000. On December 31, 2019, Percy's accounts receivable were $400,000 What was Percy's average collection period for 2019? A) 85.9 days B) 15.5 days C) 95.4 days D) 43.0 days 22. On January 1, 2019, Upward Company purchased a copy machine. The machine costs $320,000, its estimated useful life is 8 years, and its expected salvage value is $20,000 What is the depreciation expense for 2020 using double-declining balance method? A) $80,000 B) $60,000 C) $52.500 D) $35,000 23. Which statement is true concerning the straight-line method of depreciation? A) Depreciation is recognized evenly over the estimated useful life of the asset B) Purchase cost is expensed in the year of acquisition C) Depreciation is equal to the proceeds received on sale less the amount paid to acquire the asset D) Depreciation does not take salvage value into consideration 24. Which of the following estimates are required when calculating depreciation expense? 1. Depreciation rate 2. Useful life 3. Expected maintenance costs 4. Salvage value A) 1, 2, and 4 B) 1, 2, 3, and 4 C) 2 and 4 D) 2, 3, and 4 25. Saul Company purchased a tractor at a cost of $120,000. The tractor has an estimated salvage value of $20,000 and an estimated life of 8 years, or 12,000 hours of operation. The tractor was purchased on January 1, 2019 and was used 2,400 hours in 2019 and 2,100 hours in 2020. What method of depreciation will produce the maximum depreciation expense in 2020? A) Straight-line B) Units-of-production C) Double-declining-balance D) All methods produce the same expense in 2020 26. Spencer Company purchased a tractor at a cost of $360,000 on January 1, 2019. The tractor has an estimated salvage value of $60,000 and an estimated life of 8 years. If Spencer uses the straight-line method, what is the book value at January 1, 2023? A) $210,000 B) $150,000 C) $247,500 D) None of the above 27. Berning Company purchased a tractor at a cost of $540,000. The tractor has an estimated salvage value of $60,000 and an estimated life of 8 years, or 10,000 hours of operation. The tractor was purchased on January 1, 2019 and was used 2,400 hours in 2019 and 2,100 hours in 2020. On January 1, 2021, the company decided to sell the tractor for $210,000. Berning uses the units-of-production method to account for the depreciation on the tractor. Based on this information, the entry to record the sale of the tractor will show A) No gain or loss on the sale B) A loss of $114,000 C) A loss of $150,000 D) A gain of $150,000 28. Goodwill can be recorded as an asset when: A) An offer is received to purchase the business at a price in excess of the value of the assets B) A business has above normal profitability compared to other businesses in its industry C) A business is purchased and payment is made in excess of the fair value of the identifiable net assets D) A business can determine that it has created customer goodwill and name recognition 29. Which of the following plant assets is not depreciated? A) Leasehold improvements B) Equipment C) Land for site use D) Furniture 30. Oval Company acquired a machine that involved the following expenditures and related factors: Gross invoice price... $76,000 Sales tax...... Cash discount taken ...... Freight Assembly of machine .... Installation of machine ....... Assorted spare parts for future use..... Tuning and adjusting machine before use .. 2,850 1,140 1,350 1,800 2,700 5,400 900 The initial accounting cost of the machine should be: A) $87,010 B) $84.460 C) $89,860 D) $85,600 31. Minerva Company purchased land and a building for a total price of $5,200,000. Individually, the land was appraised at $840,000 and the building at $4.760,000. How much should be recorded as the acquisition cost of each asset? A) Land, $840.000; building. $4.760,000 B) Land, $840,000; building, $4,360,000 c) Land, $780,000; building, $4,420,000 D) Land, $800,000: building. $4.400,000 32. The purpose of depreciation accounting is to: 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 33. On January 1, 2019, Mango Company purchased a new truck for $88,200. Its estimated useful life is seven years or 200,000 miles. The truck's expected salvage value is $4,200. During 2019, the truck was driven 20,000 miles. Assuming units-of-production depreciation, 2019 depreciation expense is: A) $10,584 B) $12,600 C) $ 8,400 D) $12,000