Help me finish my quiz 6 review. It is done half way and I need it to study for the upcoming exams

Financial Accounting Quiz 6 Score % Name Marquis Wallace Course: Financial Accounting Section FILL-IN-THE-BLANKPRINCIPLES AND TERMINOLOGY INSTRUCTIONS: Complete each of the following statements by writing the appropriate words in the Answers column. Answers 0. 1-2. The depreciation method that varies the amount of depreciation with the asset's usage is called ................................................................................ Three common depreciation methods are units-of-production, units-of-production For Scoring 0. ____ Straight line 1. _________________________, and .......................................................... 2. _________________________. ................................................................. Declining balance 2. ____ 3. The periodic write-off of the cost of an intangible asset to expense is called Amortization 3. ____ 4. Costs that are chargeable to an asset account or its related accumulated depreciation account are termed ................................................................. Improvements 5. Cost of an asset minus its accumulated depreciation is called ................... Book value 6. Long-lived assets that are useful in the operations of a business, that are not held for sale, and that have no physical qualities are usually classified on the balance sheet as .............................................................................. Intangible assets 7-9. The following expenditures are related to land acquired for use by a business. Indicate the account that should be debited for each expenditure .... Land improvements 7. Cost of paving parking areas ...................................................................... Land 8. Cost of razing unwanted building ................................................................ 9. Realty broker's commission paid in purchasing land .................................. Land The following expenditures are related to equipment acquired for use by a business. Indicate the account that should be debited for each expenditure. Equipment 10. Cost of vandalism on the equipment during installation .............................. Equipment 11. Special foundation ....................................................................................... 12. New parts to replace those damaged in installation .................................... Equipment 12. ____ 13. Installation costs .......................................................................................... Equipment 13. ____ 14. A patent is referred to as a (n) ..................................................................... Intangible asset 14. ____ 15. The expense account for using natural resources is ................................... Depletion expense 15.____ 10-13. 1. ____ 4. ____ 5. ____ 6. ____ 7. ____ 8. ____ 9. ____ 10. ____ 11. ____ NOTE: Each blank is worth one point PROBLEM 1PROBLEMS INSTRUCTIONS: Solve each of the following problems and record the answers in the Answers column. Answers 0. If the cost of a fixed asset is $50,000 and its accumulated depreciation is $35,000, its book value is ........................................................................ 1-3. Equipment priced at $130,000 is acquired by trading in a similar asset and paying $115,000. $15,000 $115,000 + $23,000 = $138,000 but the cost basis is capped at $130,000 since cost cannot be higher For Scoring 0. ____ than market. 1. If the book value of the asset traded in was $23,000, the cost basis of the new asset is ............................................................................................. 1. ____ Answers 2. 3. 4. For Scoring If the book value of the asset traded in had been $8,000, the cost basis of the new asset would be ....................................................................... $123,000 2. ____ If the book value of the asset traded in had been $15,000, the cost basis of the new asset would be........................................................................ $130,000 3. ____ A patent with a cost of $150,000 has an estimated useful life of 5 years and a legal life of 12 years. The annual amortization is ......................... $ 4. ____ 5-7. Machinery acquired on the first day of the current fiscal year for $750,000 has an estimated useful life of 5 years or 50,000 hours and a residual value of $0. Determine the depreciation for the current year by each of the following methods: 5. Straight-line ............................................................................................. $750,000 / 5 = $150,000 5. ____ 6. Double-declining-balance ........................................................................ Straight-line depreciation percentage is 20% per year, so the doubledeclining percentage would be 40%. 750,000 x 40% = $300,000 6. ____ 7. Units-of-production (the equipment was used for 5,000 hours during the year) .................................................................................................. Depreciation per hour = $750,000 / 50,000 = $15 per hour. Current year depreciation = 5,000 x 15 = $75,000 7. ____ 8-9. Based on the data in Question 5-7, and assuming that the machinery was used for 10,000 hours in the second year, determine the depreciation for the second year by each of the following methods: 8. Double-declining-balance ........................................................................ $108,000 8. ____ 9. Units-of-production .................................................................................. $150,000 9. ____ 10-11. Based on the data in Question 5-7, and assuming that the machinery was used for 5,500 hours in the third year, determine the depreciation for the third year by each of the following methods: 10. Double-declining-balance ........................................................................ $108,000 10. ____ 11. Units-of-production .................................................................................. $82,500 11. ____ NOTE: Each blank is worth one point. PROBLEM 2ANALYSIS OF TRANSACTIONS INSTRUCTIONS: In the appropriate columns, insert the letters of the accounts to be debited and credited in recording the following transactions. (Do not record amounts.) ACCOUNTS A. Accounts Receivable F. Depletion Expense K. Notes Payable B. Accumulated Depletion G. Equipment L. Notes Receivable C. Accumulated DepreciationEquipment H. Gain on Disposal of Fixed Assets M. Research and Development D. Amortization ExpensePatents I. Goodwill Expense E. Cash J. Loss on Disposal of Fixed Assets TRANSACTIONS 0. Recorded amortization of patents, $12,500 .............................................. N. Patents Debit D For Scoring 0. ____ Credit N For Scoring 0. ____ 1-2. Traded in old equipment for similar equipment priced at $75,000, receiving a trade-in allowance of $8,000 and paying the balance in cash. (Cost of the old equipment was $37,500; accumulated depreciation, $30,000) ................................................................................................... 1. ____ 2. ____ 3-4. Traded in equipment costing $47,500, with accumulated depreciation of $30,000, for similar equipment priced at $60,000; received a trade-in allowance of $5,000 and issued a note for the balance ........................... 3. ____ 4. ____ 5-6. Paid research and development expense, $40,000 ................................. 5. ____ 6. ____ 7-8. Discarded equipment: cost, $83,750; accumulated depreciation, $82,750 7. ____ 8. ____ 9-10. Sold for $5,000 cash the following equipment: cost, $57,500; accumulated depreciation, $55,000 .......................................................... 9. ____ 10. ____ 11-12. Sold on account for $8,000 the following equipment: cost, $32,000; accumulated depreciation, $15,000 .......................................................... 11. ____ 12. ____ 13-14. Recorded depletion, $18,500 ................................................................... 13. ____ 14. ____ FILL-IN-THE-BLANKPRINCIPLES AND TERMINOLOGY INSTRUCTIONS: Complete each of the following statements by writing the appropriate words or amounts in the Answers column. Answers 0. The total earnings of an employee for a payroll period, before deductions, is referred to as ......................................................................................... gross pay For Scoring 0. ____ 1-3. The three common payroll taxes levied against employers are: 1. ................................................................................................................... 1. ____ 2. ................................................................................................................... 2. ____ 3. ................................................................................................................... 3. ____ 4. Of the two payroll taxesfederal income tax and federal unemployment compensation taxthe one not subject to a ceiling on the earnings subject to the tax is ................................................................................... 4. ____ 5-7. A 180-day, 15% note for $175,000 dated March 10, payable to Third Bank & Trust, is signed by Arthur Co. 5. The maturity date of the note is ................................................................ 5. ____ 6. The interest payable at the maturity date is .............................................. $ 6. ____ 7. The maturity value of the note is .............................................................. $ 7. ____ 8. The amount of the discount is .................................................................. $ 8. ____ 9. The amount of the proceeds is ................................................................. $ 9. ____ 8-9. Assume that the note referred to in Question 5-7 was not interest-bearing but was discounted at Third Bank & Trust at a rate of 12%. 10. The detailed payroll record maintained for each employee is called the .. 10. ____ 11. A pension plan in which the employer makes contributions but the employee bears the investment risk is called a ........................................ 11. ____ 12. The vacation pay expense for the current year is estimated at $200,000. If two-thirds of the vacations were taken during the current year and the remainder of the vacations will be taken in future years, how much expense should be reported in the current year? ..................................... NOTE: Each blank is worth one point $ 12. ____ PROBLEM 3ANALYSIS OF TRANSACTIONS INSTRUCTIONS: Indicate the titles of the general ledger accounts to be debited and credited in recording the transactions below by inserting in the appropriate column the letters of the account titles listed. A. B. C. D. E. Accounts Payable Accounts Receivable Cash Employees Income Tax Payable Federal Unemployment Tax Payable F. G. H. I. J. ACCOUNTS Social Security Tax Payable Interest Expense Interest Revenue Interest Payable Interest Receivable TRANSACTIONS 0. Issued an interest-bearing note to a creditor on account ......................... K. L. M. N. O. Medicare Tax Payable Notes Payable Notes Receivable Payroll Tax Expense State Unemployment Tax Payable Debit A For Scoring 0. ____ Credit L For Scoring 0. ____ 1-2. Paid the note issued in Question 0 ........................................................... 1. ____ 2. ____ 3-4. Discounted our note payable at the bank ................................................. 3. ____ 4. ____ 5-6. Paid the note issued in Question 3-4 ........................................................ 5. ____ 6. ____ 7-8. Prepared journal entry to record the employer's payroll taxes (FICA, federal unemployment, and state unemployment) ................................... 7. ____ 8. ____ NOTE: Each blank is worth one point