Question
3. A building with an appraisal value of $135,757 is made available at an offer price of $158,563. The purchaser acquires the property for $34,867
3. A building with an appraisal value of $135,757 is made available at an offer price of $158,563. The purchaser acquires the property for $34,867 in cash, a 90-day note payable for $23,496, and a mortgage amounting to $58,384. The cost basis recorded in the buyer's accounting records to recognize this purchase is
a.$158,563
b.$135,757
c.$123,696
d.$116,747
4. A machine with a cost of $135,000 has an estimated residual value of $15,000 and an estimated life of 6 years or 15,000 hours. It is to be depreciated by the units-of-activity method. What is the amount of depreciation for the second full year, during which the machine was used 5,100 hours?
a.$51,000
b.$40,800
c.$25,800
d.$5,100
5. On December 31, Strike Company has decided to discard one of its batting cages. The equipment had an initial cost of $205,000 and has accumulated depreciation of $184,500. Depreciation has been recorded up to the end of the year. Which of the following will be included in the entry to record the disposal?
a.Equipment, credit, $205,000
b.Gain on Disposal of Asset, credit, $20,500
c.Loss on Disposal of Asset, debit, $184,500
d.Accumulated Depreciation, debit, $205,000
6. Equipment with a cost of $154,821 has an estimated residual value of $8,049 and an estimated life of 4 years or 15,860 hours. It is to be depreciated by the straight-line method. What is the amount of depreciation for the first full year, during which the equipment was used for 3,136 hours?
a.$36,693.00
b.$29,021.25
c.$38,705.25
d.$29,068.05
7.
Computer equipment was acquired at the beginning of the year at a cost of $58,800. It had an estimated residual value of $4,800 and an estimated useful life of five years. Determine the (a) depreciable cost, (b) straight-line rate, and (c) annual straight-line depreciation.
a. Depreciable cost | $ | |
b. Straight-line rate | % | |
c. Annual straight-line depreciation | $ |
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