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 an $9,000 salvage value. During Year 2, Friedman drove the truck 27,000 miles. Friedman uses the units-of-production method. What is depreciation expense in Year 2? (Do not round intermediate calculations.): rev: 11_10_2018_QC_CS-147760

Multiple Choice

$5,805

$7,020

$5,375

$6,500

17)Dinkins Company purchased a truck that cost $72,000. The company expected to drive the truck 100,000 miles over its 5-year useful life, and the truck had an estimated salvage value of $11,000. If the truck is driven 32,000 miles in the current accounting period, what would be the amount of depreciation expense for the year? (Do not round intermediate calculations. Round your final answer to the nearest whole dollar amount.)

• $19,520

• $23,040

• $12,200

• $28,800

  On January 1, Year 1, the City Taxi Company purchased a new taxi cab for $39,000. The cab has an expected salvage value of $4,000. The company estimates that the cab will be driven 200,000 miles over its life. It uses the units-of-production method to determine depreciation expense. The cab was driven 48,000 miles the first year and 51,000 the second year. What is the amount of depreciation expense reported on the Year 2 income statement and the book value of the taxi at the end of Year 2, respectively? (Do not round intermediate calculations.)

• $9,945 and $19,695

• $9,945 and $15,695

• $8,925 and $21,675

• $8,925 and $17,675

On April 1, Year 1, Fossil Energy Company purchased an oil producing well at a cash cost of $8,370,000. It is estimated that the oil well contains 720,000 barrels of oil, of which only 620,000 can be profitably extracted. By December 31, Year 1, 31,000 barrels of oil were produced and sold. What is depletion expense for Year 1 on this well? (Do not round intermediate calculations.):

• $418,500

• $558,000

• $139,500

• $360,375

Glick Company purchased oil rights on July 1, Year 1 for $2,800,000. A total of 200,000 barrels of oil are expected to be extracted over the assets life, and 50,000 barrels are extracted and sold in Year 1. Which of the following correctly summarizes the effect of the Year 1 depletion expense on the elements of the financial statements? (Do not round intermediate calculations.):

• A decrease in stockholders equity of $200,000.

• A decrease in assets of $500,000.

• A decrease in assets of $700,000.

• An increase in stockholders equity of $740,000.

The balance sheet of Flo's Restaurant showed total assets of $480,000, liabilities of $152,000 and stockholders equity of $378,000. An appraiser estimated the fair value of the restaurant assets at $565,000. If Alice Company pays $745,000 cash for the restaurant, what is the amount of goodwill?

• $180,000

• $265,000

• $367,000

• $332,000

On January 1, Year 1, Stiller Company paid $192,000 to obtain a patent. Stiller expected to use the patent for 5 years before it became technologically obsolete. The remaining legal life of the patent was 8 years. Based on this information, what is the amount of amortization expense during Year 3 and the book value of the patent as of December 31, Year 3, respectively?

• $24,000 and $72,000

• $38,400 and $76,800

• $24,000 and $120,000

• $38,400 and $115,200