Ava's antiques shop purchases two buildings in two different cities with the intent to grow the business. However, with the downturn in the economy, Ava is insure if they will be able to open the two new stores. The following information is available:

Building 1Building 2Book Value$500$750Sum of Expected Cash Flows$505$700Fair Value (PV of Sum of Expected Cash Flows)$490$620

After testing for impairment and recording any necessary write downs, what is the book value of Building 2?

$700,000

$750,000

$620,000

None of the above

On 10/1/X1, Cameron's Deli purchased a used delivery truck with an estimated remaining life of 7 years for $21,000 paying $7,000 cash down and a note to pay the difference over 5 years at 4.5% interest. In addition, Cameron had to pay sales tax of 6% on the sales price and license and registration fees of $250 on the date of sale. Prior to using the truck, Cameron had to replace all 4 tires at a cost of $450 and have decals of the company's logo and number placed on the truck at a cost of $320. Cameron also paid a $150 insurance premium at the end of the month. Cameron determined the truck would have a salvage value of $1,200 and straight-line depreciation method (if necessary) would be used.

What is reported as Depreciation expense, related to this asset, for the year ended 12/31/X1

3,326

831

789

3154

A furnace with an estimated salvage value of $5,000 and a 12-year estimated useful life had accumulated $4,000 of depreciation on a straight-line basis after 2 years of use. Assuming the furnace's appraised value at the end of 2 years is $26,000, the net amount to be reflected on the balance sheet at this point would be $23,000.

True

False

On 10/1/X1, Cameron's Deli purchased a used delivery truck with an estimated remaining life of 7 years for $21,000 paying $7,000 cash down and a note to pay the difference over 5 years at 4.5% interest. In addition, Cameron had to pay sales tax of 6% on the sales price and license and registration fees of $250 on the date of sale. Prior to using the truck, Cameron had to replace all 4 tires at a cost of $450 and have decals of the company's logo and number placed on the truck at a cost of $320. Cameron also paid a $150 insurance premium at the end of the month. Cameron determined the truck would have a salvage value of $1,200 and straight-line depreciation method (if necessary) would be used.

Immediately Expense all costs incurred in getting hte trucky ready for its use including the purchase price, sales tax, license and registration, tires decals and insurance premiums

Capitalize all costs incurred in getting the truck ready for its use including the purchase price, sales tax, license and registration, tires, decals and insurance premiums. These Capitzliaed costs will be depreciated over 7 years.

Capitalize the costs incurred in purchasing the truck, including sales tax, license and registration. These capitalized costs will be depreciated over 7 yars. Cameron will immediately expense the remaining costs: tires, decals and insurance premiums

None of the above.