5.If Ace Company and Deuce Company trade machines, Ace should set up the new machine

None of the above are correct statements

At zero since there was no cash paid

At fair market value unless the machines are deemed similar and there is no culmination of the earnings process

At the net book value of the machine given up

At the net book value of the machine given up

6.A truck purchased by Ace Trucking Co. costs $80,000. It is expected to last for 10 years but to be traded-in after 3 years for a newer model (the trade-in allowance will be about $2,000).

The trade in allowance is not part of the depreciation calculation

The truck will be depreciated over 10 years

None of the above

The truck will be depreciated over 3 years

The truck will be depreciated at one rate the first three years and at a different rate the remaining 7 years

8.On January 1, 2013, Dexter Corporation purchased a piece of equipment, which is being depreciated on a straight-line basis over a useful life of 5 years, with a residual value of $20,000. The equipment's accumulated depreciation account has a credit balance of $78,000 and an adjusted credit balance of $100,000 on January 1, 2015 and December 31, 2015, respectively. The original cost of the equipment is

None of the other alternatives are correct

$110,000

$ 20,000

$100,000

$130,000

9.Wingert Co., purchased a new truck for $62,000. The truck is expected to have a salvage value of $12,000 four years later after using it for 100,000 kilometers. During the first and second years of operation, Wingert Co. put 25,000 and 10,000 kilometers respectively, on the truck. For the second year, depreciation expense would be:

$5,000

None of the above

$7,400

$12,500

$18,500

10.Your company pays $620,000 for a patent that has 10 years remaining. Each year, your company should:

debit amortization expense for $62,000 and credit accumulated amortization for $62,000.

report no amortization expense because patents are not subject to amortization.

none of the above

debit amortization expense for $31,000 and credit intangible assets for $31,000.

debit intangible assets and credit accumulated amortization for an amount equal to 20% of book value.