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A company acquired some land for $75,000 to construct a new office complex. Legal fees paid were $2,750, delinquent taxes assumed were $3,250, and $6,350

A company acquired some land for $75,000 to construct a new office complex. Legal fees paid were $2,750, delinquent taxes assumed were $3,250, and $6,350 was paid to remove an old building. Materials salvaged from the demolition of the building were sold for $2,300. Determine the cost of the land to be reported on the balance sheet.

a. $84,100
b. $89,650
c. $85,050

d. $87,350

An equipment was purchased for $15,000. It has a useful life of 5 years and a residual value of $4,000. Determine the depreciation expense for the first year using the double-declining-balance method?

a. $2,600
b. $2,200
c. $6,000

d. $5,400

An equipment was purchased for $30,000. It has a useful life of 5 years, and a residual value of $4,000. Compute the depreciation expense for the second year using the double-declining-balance method.

a. $6,000
b. $7,200
c. $5,200

If a fixed asset with an original cost of $18,000 and accumulated depreciation of $2,000 is sold for $15,000, the company must:

a. recognize a gain on the income statement under other revenues.
b. recognize a loss on the income statement under other expenses.
c. recognize a gain on the income statement under revenues.

d. recognize a loss on the income statement under operating expenses.

Goodwill is:

a. amortized over 40 years or its economic life, whichever is shorter.
b. charged to expense immediately.
c. amortized in a manner similar to other intangibles.

d. written down only if an impairment in value occurs.

A patent was purchased for $585,000 with a legal life of 20 years. Management estimates that the patent has an 12-year economic life. The entry to record amortization would include:

a. an increase in accumulated amortization for $585,000.
b. an increase in amortization expense for $29,250.
c. a decrease in patent for $48,750.
a. 2.08
b. 2.01
c. 1.02
d. 2.10

d. an increase in research and development expense for $585,000.

BlueInk Roadways Corporation operates throughout the United States. The following data (in millions) were adapted from recent financial statements of BlueInk.

From the above data, what would be the fixed asset turnover for Year 2?
Year 2 Year 1
Net sales $15,504 $9,685
Beginning of year property, plant, and equipment 7,531 5,727
End of year property, plant, and equipment 7,380 5,563

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