Also, on January 1, 2018 the company buys a truck (and associated costs) on account. The truck costs $50,000, sales tax $4000 and insurance during delivery $1000. What is the JE for the capitalization of the truck? debit cash and credit equipment $50,000 debit equipment and credit cash $50,000 debit equipment and credit accounts payable $54,000 debit accounts receivable and credit equipment $55,000 debit equipment and credit accounts payable $55,000 Periodic annual payments on a mortgage bond are interest and principal are principal only increase the company's liabilities are interest only have increasing portions of interest and decreasing portions of principal as time goes on Which of the following statements is false? Before recording asset sale, depreciation must be updated and recorded The depreciable cost of an asset under straight-line and units of activity is the capitalized cost minus salvage value depreciation under units of activity depends on units used or produced depreciation is an allocation of cost and has nothing to do with market value total depreciation under double-declining method exceeds that under straight-line A company has total assets of $1,500,000 of which current assets are $500,000 and total liabilities of $1,000,000 of which current liabilities are $400,000. What is the company's current ratio? 1.43 1.5 0.80 0.67 1.25 On 1/1/21 a company purchases a patent that is capitalized at $100,000 and the life of the patent is 20 years. What is the JE at the end of the year on 12/31/21 to record amortization? a debit amortization expense and credit patent $5000 c. debit amortization expense and credit patent $4250 debit amortization expense and credit patent $4000 intangible assets are not amortized b. debit amortization expense and credit patent $10,000 On 7/1/21 a copier is purchased with a capitalized cost of $5500, has an estimated life of 10 years and salvage value of $500. What is the depreciation Je made on 12/31/21 under straight-line depreciation? d. debit depreciation expense $550 and credit accumulated depreciation $550 b. debit depreciation expense $275 and credit accumulated depreciation $275 e. debit depreciation expense $540 and credit accumulated depreciation $540 c. debit depreciation expense $500 and credit accumulated depreciation $500 a. debit depreciation expense $250 and credit accumulated depreciation $250 To record cost allocation over time of a natural resource, we credit Accumulated depreciation The asset itself Accumulated depletion natural resource acquisition are expensed, not capitalized Accumulated amortization After updating depreciation on 12/31/22, a company exchanges an old computer (capitalized cost $5500, accumulated depreciation $500 and fair market value $4750) plus $100 cash for a new computer. What is the JE? b. debit new equipment $4750, Acc Dep $550 and loss on disposal $300; credit old equipment $5500 and cash $100 e. debit new equipment $4850, Acc Dep $1080; credit old equipment $5000, gain on disposal $830 and cash $100 c debit new equipment $4750, Acc Dep $1000; credit old equipment $5000, gain on disposal $650 and cash $100 a debit new equipment $4850, Acc Dep $500 and loss on disposal $250; credit old equipment $5500 and cash $100 d. debit new equipment $4850, Acc Dep $1100; credit old equipment $5500, gain on disposal $350 and cash $100
