A machine originally had an estimated service life of 5 years, and after 3 years, it was decided that the original estimate should have been for 10 years. The remaining cost to be depreciated should be allocated over the next

Multiple Choice

• 5 years

• 6 years

• 10 years

• 7 years

• 2 years

• Creek Construction owned a bulldozer which was destroyed by fire. The bulldozer originally cost $38,000. The accumulated depreciation recorded to the date of loss was $20,000. The proceeds from the insurance company were $20,000. Creek Construction should recognize

  Multiple Choice

• An expense of $2,000

• A loss of $38,000

• A loss of $2,000

• A gain of $2,000

• A gain of $20,000

• TB 09-35 SportsWorld purchased store equipment for $6...

  SportsWorld purchased store equipment for $65,000. The equipment has an estimated residual value of $6,000, with an estimated useful life of 10 years. The annual depreciation using the straight-line method will be $3,900 per year.

  True or False

  TrueFalse

• The cost of land can include

  Multiple Choice

• Costs of removing existing buildings

• All of these

• Real estate commissions

• Purchase price

• Back property taxes

• The gain or loss from disposal of property, plant and equipment is the difference between an asset's book value and the value received.

  True or False

  TrueFalse

• When originally purchased, a vehicle had cost $23,000, with an estimated residual value of $1,500, and an estimated useful life of 8 years. After 4 years of straight-line depreciation, the estimated useful life was revised from 8 to 6 years, but with zero residual value. The depreciation expense in year 5 should be

  Multiple Choice

• $2.687.50

• $6,125.00

• $5,543.75

• $2,856.25

• The cost principle requires that an asset be recorded at the cash or cash equivalent amount given in exchange.

  True or False

  TrueFalse

• $10,750.00