Bruno Company purchased equipment on January 1, 2020 at a total invoice cost of $280,000; additional costs of $5,000 for freight and $25,000 for installation were incurred. The equipment has an estimated salvage value of $10,000 and an estimated useful life of years. The amount of accumulated depreciation at December 31, 2021 if the straight-line method of deprecation is used is O a $60,000 b.$120,000 O c $54,000 O d. $108,000 QUESTION 2 Spinoza Enterprises purchased a machine on January 1, 2019, for $8,000 with an estimated salvage value of $2,000 and an estimated useful life of 8 years. On January 1, 2021, Spinoza decides the machine will last 12 years from the date of purchase. The salvage value is still estimated at $2,000 Using the straight line method, the new annual depreciation will be O a. $450 O b.5667 c. $500 d. $600 Which of the following would be considered an ordinary repair? O a. Replacing a stairway with an escalator O b. Painting of buildings O c. Constructing a new wing on a building O d. A major motor overhaul of a new truck A corporation purchases 10,000 shares of its own $20 par common stock for $35 per share, recording it at cost. What will be the effect on total stockholders' equity? a. decrease $350,000 Obino net effect on stockholders' equity Oc decrease $200,000 di increase $200,000 Wells, Inc. issues 2,000 shares of $10 par value common stock at $22 per share. The entry for the issue will include a credit of $24,000 to O a. Gain from the Sale of Stock Ob. Common Stock O Paid in Capital, Treasury Stock Od. Paid in Capital in Excess of Par Value The charter of a corporation provides for the issuance of 100,000 shares of common stock. Assume that 60,000 shares were originally issued and 5,000 were subsequently bought back. What is the number of shares outstanding? a. 5,000 Ob.55,000 O c 60,000 O d. 100,000 A purchased patent has a remaining legal life of 15 years. It should be O a. not amortized. O b.amortized, but number of years is not determinable based on information given. O c. amortized over 15 years. O d.expensed in the year of acquisition Abelard Company expects to extract 15 million tons of coal from a mine that cost $25,000,000. If no salvage value is expected, and 3 million tons are mined in the first year, the entry to record depletion in the first year will include a O a.credit to Accumulated Depletion for $1,800,000 Obs.debit to Depletion Expense for $5,000,000 Oc debit to Accumulated Depletion for $3,000,000 O d.credit to Depletion Expense for $5,000,000 A plant asset cost $27,000 when it was purchased on January 1, 2014. It was depreciated by the straight line method based on a 9 year life with no salvage value. On June 30, 3021, the asset was discarded with no cash proceeds. What gain or loss should be recognized on the disposal? a. No gain or loss b.$6,000 loss O $4,500 loss Od $3,000 gain Betterments are O a. revenue expenditures. O b. debited to an appropriate asset account when they increase useful life. O c. debited to accumulated depreciation when they do not increase useful life. O d. debited to an appropriate asset account when they do not increase useful life
