MULTIPLE CHOICE QUESTIONS (30 POINTS) 1. The book value of an asset in the property, plant and equipment category is: a. The accumulated depreciation of the asset as of the current date. b. The difference between the original cost and the accumulated depreciation of the date. c. The current replacement cost of the asset. d. The original cost of the asset. 2. Which of the following statements is TRUE? a. Depreciation expense and accumulated depreciation are both reported on the income statement b. Depreciation expense and accumulated depreciation are both reported on the balance sheet. c. Depreciation expense is reported on the income statement and accumulated depreciation is reported on the balance sheet. d. Depreciation expense is reported on the balance sheet and accumulated depreciation is reported on the income statement 3. Bat Company acquired new machinery on 1 January 2015 at a cost of TL48,000 that was estimated to have a useful life of 10 years and a residual salvage value of TL12,000. Straight-line depreciation was used. On 1 January 2021, following six full years of use of the machinery, management decided that the estimate of useful life had been too long and that the machinery would have to be retired on 1 January 2023, that is, at the end of the eighth year of service. Under this revised estimate, the depreciation expense for the seventh year of use would be: a. TL7,200 b. TL9,600 c. TL13,200. d. TL14,400. 4. An asset having a four-year service life and a salvage value of TL5,000 was acquired for TL45,000 cash on April 01. Using straight-line depreciation, what will be the depreciation expense at the end of the first year, December 31? a. TL7,500 b. TL8,437.50 c. TL9,375 d. TL10,000 5. A factory machine is purchased for TL50,000 on July 1. The machine is expected to have no salvage value at the end of its useful life of 5 years and be useful for 25,000 machine hours. The company decides to use the units-of-production method for depreciating the asset. If the machine is used for 1.920 hours during the first year, what is the book value of the asset at the end of year one? a. TL3,840 b. TL40,000 c. TL46,160 d. None of the above