41. Plant assets are: A) Tangible assets used in the operation of a business that have a useful life of more than one accounting period. B) Current assets. C) Held for sale. D) Intangible assets used in the operations of a business that have a useful life of more than one accounting period. E) Tangible assets used in the operation of business that have a useful life of less than one accounting period. The relevant factor(s) in computing depreciation include: A) Cost. B) Salvage value. Useful life. D) Depreciation method. E) All of the above. 12 43. Salvage value is: A) Also called residual value. B) Also called scrap value. 43 Salvage value is: A) Also called residual value. B) Also called scrap value C). An estimate of the asset's value at the end of its benefit period. D) A factor relevant to determining depreciation E) All of the above Page 3 of 16 44 Depreciation: A) Measures the decline in market value of an asset B) Measures physical deterioration of an asset. C) Is the process of allocating to expense the cost of a plant asset D) Is an outflow of cash from the use of a plant asset E) is applied to land. 45. A machine originally had an estimated useful life of 5 years, but after 3 complete years, it was decided that the original estimate of useful life should have been 10 years. At that point the remaining cost to be deprecated should be allocated over the remaining A) 2 years B) 5 years C) D) 8 years E) 10 years 7 years 46 Candeo Inc. has an annual accounting period which ends on December 31. During the current year a depreciable asset which cost $42,000 was purchased on September 2. The asset has a $4,000 estimated salvage value. The company uses straight-line depreciation and expects the asset to have a 5.year life. What is the total depreciation expense for the current year? A) $1,900.00 3) $7,500.00 46 Cardco Inc. has an annual accounting period which ends on December 31. During the current year a depreciable at which cost $12,000 was purchased on September 2. The set has a $4,000 estimated salvage value. The company uses straight-line depreciation and expects the asset to have a 5-year life. What is the total depreciation expense for the current year? A) $1,900.00 B) $7,600.00 C) $2,533.33 D) $2,800.00 E) $3.166.67 47 The modified accelerated cost recovery system (MACRS) A) is included in the US federal income tax rules for depreciatingasts B) is required for tax reporting C) Is required for financial reporting D) Is identical to units of production depreciation. E) All of the above The straight line depreciation method and the double-declining balance depreciation method A) Produce the same total depreciation over answeful life Produce the same depreciation expense each year Produce the same book value each year D) Are acceptable for tax purposes only. E) Are the only acceptable methods of depreciation for financial reporting
