Name MULTIPLE CHOICE. Choose the one alternative that best completes the . Choose the one alternative that best completes the statement or answer the question, 1) Which of the following is included in the cost of land? A) cost of fencing B) cost of clearing the land C) cost of paving D) cost of outdoor lighting 2) Hastings Company has purchased a group of assets for $15,000. The assets and their relative market values are listed below. Land Equipment Building 1 $6,500 2,000 9,000 Which of the following amounts would be debited to the Land account? A) $5,571 B) $1,714 C) $1,962 D) $7,714 3) 3) A company's accountant capitalized a payment that should be recorded as a revenue expenditure. How will this error affect the financial statements of the company? A) Assets will be overstated. B) Liabilities will be overstated. C) Expenses will be overstated. D) Net income will be understated. 4) A company purchased a used machine for $10,000. The machine required installation costs of $1,000 and insurance while in transit of $500. At which of the following amounts would the machine be recorded? A) $11,000 B) $10,500 B C ) $10,000 D) $11,500 5) 5) Nobells Inc. has acquired a property that included both land and a building for $500,000. The company hired an appraiser who has determined that the market value of the land is $300,000 and that of the building is $400,000. At what amount should the company record the cost of land? A) $250,000 B) $214,286 C) $147,368 D) $52,632 6) 6) On January 1, 2015, Anodel Inc, acquired a machine for $1,000,000. The estimated useful life of the asset is 5 years. Residual value at the end of 5 years is estimated to be $50,000. Calculate the depreciation expense per year using the straight-line method. A) $190,000 B) $250,000 C) $240,000 D) $200,000 7 7) On January 1, 2015, Zade Manufacturing Company purchased a machine for $40,000,000. The company expects to use the machine for 24,000 hours over the next 6 years. The estimated sale value of the machine at the end of the sixth year is $40,000. The company used the machine for 3,600 hours in 2015 and 5,000 hours in 2016. Calculate book value of the machine at the end of 2016 if the company uses the units-of-production method of depreciation. A) $24,352,951 C) $17,777,778 D) $28,532,688 8) 5) Cost of an asset is $1,000,000 and its residual value is $100,000. Estimated useful life of the asset is four years. Calculate depreciation for the second year using the double-declining-balance method of depreciation A) $450,000 B) $225,000 C) $240,000 D) $250,000 9 9) Corel Sales sold its old office furniture for $5.000. Its original cost was $10,000 and at the time of sale, it had accumulated depreciation of $7,000. What was the effect of the transaction? A) gain of $5,000 B) loss of $2,000 C) loss of $5,000 D) gain of $2,000 10) A coal mine costs $1,000,000 and is estimated to hold 50.000 tons of coal. There is no residual value. 3,000 tons are extracted and sold during the first year of operations. Calculate depletion per unit. A) $5 B) $15 C) $10 D) $20 10) 11) 11) Server Solutions paid $200,000 to acquire Tabletz Inc, an electronic gadget-advertising website. At the time of the acquisition, Tabletz's balance sheet reported total assets of $200,000 and liabilities of $100,000. The fair market value of Tabletz's assets was $200,000. The fair market value of its liabilities was $100,000. How much goodwill did Server Solutions purchase as part of the acquisition of Tabletz? A) $100,000 B) $200,000 $150,000 D) $50,000 12) Which of the following is an intangible asset? A) building land B) plant and machinery D) goodwill 13) 13) Maple Company had net sales of $200,550 for the year ended December 31, 2015. Its beginning and ending total assets were $75,200 and $110,500, respectively. Determine Maple's asset tumover ratio for the year ended December 31, 2015. A) 2.67 times B) 0.46 times 91.18 times D) 2.16 times 14) 14) A machine that was purchased for $100,000 has an accumulated depreciation of $70,000 as of the current date. The company exchanges the machine for a new machine. The new machine has a market value of $120,000 and company pays cash of $100,000. Assume the exchange has commercial substance. What is the result of this exchange? A) gain of $10,000 B ) loss of $10,000 gain of $5,000 D) loss of $30,000 15) 15) Sales revenue for a sporting goods store amounted to $525,000 for the current period. All sales are on account and are subject to a sales tax of 9%. Which of the following would be included in the journal entry to record the sales? A) a debit to Accounts Receivable for $572,250 B) a debit to Sales Tax Payable for $47,250 C) a credit to Accounts Receivable for $525,000 D) a debit to Sales Revenue for $525,000 16) 16) Where does unearned revenue to be earned in six months appear on the balance sheet? A) under current liabilities B) under current assets C) under long-term assets D) under long-term investments 17) A $40,000, four-month, 65% no pable de l 2015. Which of the f ing would be included in the joumal entry required on the marity date by the bone A) a debit to Interest payable for 5217 B) a credit to Note payable for $0.967 C) a debit to Interest expense for $217 D) a credit to Cash for $40,000 18) Jade signs a $6.500.8.5% si-month note dated November 1, 2013. The interest expense recorded for this note in 2013 will be A) $133. B) $184. D) $276. 992 19) The joumal entry for accrued interest on a note payable by the borrower includes: A) a debit to Interest Expense and credit to Interest Payable. B) a debit to Interest Payable and credit to Cash C) a debit to Interest Expense and credit to Cash D) a credit to Interest Expense and debit to Notes Payable. 20) Celia's had sales of $8,421. The state sales tax rate is 8%. Sales are for cash. What amount will be credited to the Sales Revenue account? A) $9,095 B) $8.421 C) $7,747 D) $674 21) 21) On August 31, 2013, Peter Services received $3,500 in advance from a customer. Which of the following would be the joumal entry to record the receipt of cash? A) debit Uneamed Revenue $3,500 and credit Service Revenue $3,500 B) debit Cash $3,500 and credit Uneamed Revenue $3,500 C) debit Cash $3,500 and credit Service Revenue $3,500 D) debit Uneamed Revenue $3,500 and credit Cash $3,500 22) Which of the following is paid by the employer only? A) Medicare tax C) Federal unemployment tax B) Employee income tax D) OASDI tax 23) Which of the following are required to be deducted from employees' paychecks? A) FUTA B) Federal income tax C) Charitable contributions D) SUTA 24) Which of the following is pay over and above base salary, usually paid for exceptional performance? A) Benefits B) Bonuses C) Wages D) FICA 25) 25) Berkley's gross pay for the month is $5,400. His deduction for federal income tax is based on a rate of 18%. He has no voluntary deductions. His yearly pay is under the limit for OASDL What is the amount of Berkley's net pay? (Assume a FICA-OASDI Tax of 4.2% and FICA-Medicare Tax of 1.45%.) A) $5,400.00 B) $4,428.00 C) $4,122.90 D) $5,094.90 26) 26) Berkley's gross pay for the week is $780. Berkley's yearly pay is under the limit for OASDL Assume that the rate for state and federal unemployment compensation taxes is 6.2%, and that Berkley's pay year-to-date has not yet exceeded the $7,000 cap. How much is the amount of state and federal unemployment tax that his employer must record as payroll tax expense and pay to the federal and state governments? A) $18.36 B) $59.67 $108.03 D) $110.10