Madison Company owned an asset that had cost $44,000. The company sold the asset on January 1, Year 4 for $16,000 Accumulated depreciation on the day of sale amounted to $32,000. Based on this information, the sale would result in Multiple Choice A $16,000 cash inflow in the investing activities section of the cash flow statement A $16,000 increase in total assets A $4,000 gain in the investing activities section of the statement of cash flows A 54.000 cash inflow in the financing activities section of the cash flow statement On January 1, Year 1, Dinwiddie Company purchased a car that cost $45,000. The car had an expected useful life of 6 years and a $10,000 salvage value Based on this information alone Multiple Choice the total amount of depreciation expense recognized over the six-year useful life will be greater under the double-declining balance method than the straight-line method the amount of deprecia expense recognized in Year 4 would be greater if Dinwiddie depreciates the car under the straight-line method than if the double declining balance method is used at the end of Year 3, the amount in the accumulated depreciation account will be less if the double-declining balance method is used than it would be if the straight-line method is used Multiple Choice the total amount of depreciation expense recognized over the six-year useful life will be greater under the double declining- balance method than the straight line method the amount of depreciation expense recognized in Year 4 would be greater if Dinwiddie depreciates the car under the straight-line method than if the double declining balance method is used at the end of Year 3, the amount in the accumulated depreciation account will be less if the double-declining balance method is used than it would be if the straight line method is used None of these statements is true Dum 27 Chico Company paid $500,000 for a basket purchase that included office furniture, a building and land. An appraiser provided the following estimates of the market values of the assets if they had been purchased separately Office furniture $110,000: Building $400,000, Land $80,000 Based on this information, the amount of cost that would be allocated to the office furniture is closest to Multiple Choice $110.000 $93 200 5166,662 arch ORE On January 1, Year 1, Friedman Company purchased a truck that cost $52,000. The truck had an expected useful life of 200,000 miles over 8 years and a $9,000 salvage value. During Year 2, Friedman drove the truck 27,000 miles. The company uses the units of production method The amount of depreciation expense recognized in Year 2 is: (Do not round intermediate calculations.) Multiple Choice $7020 55,805 55.375 $6.500 On January 6, Year 1, the Mount Jackson Corporation purchased a tract of land for a factory site for $805,000. An existing building on the site was demolished and the construction of the new factory building was completed on October 11. Year 1. Additional cost data are shown below Construction cost of new building $968,000 Realtor's and attorney's fees 15,400 Architect's fees relating to construction of new building 30,000 Cost to demolish old building 74,300 Salvage recovery from old building (11,000) Which of the following correctly states the capitalized cost of the land and the new factory building, respectively Multiple Choice S883.700 and $1048.000 5805.000 and 5126700 Multiple Choice $883,700 and $1,048,000 5805,000 and $1126,700 $820,400 and $1.11 300 5894700 and $1037000
