On January 1, Year 1, Marino Moving Company paid $138,000 cash to purchase a truck. The truck was expected to have a four-year useful life and an $23,000 salvage value. If Marino uses the double-declining-balance method, the amount of depreciation expense recognized on the Year 3 income statement is:

Multiple Choice

$11,500.

$17,250.

$69,000.

$34,500.

On January 1, Year 1, Marino Moving Company paid $54,500 cash to purchase a truck. The truck was expected to have a four-year useful life and an $10,600 salvage value. Marino uses the straight-line method. On January 1, Year 3, Marinos accounting records contained the following balances:

Truck $54,500

Accumulated Depreciation $21,950

Also, on January 1, Year 3 the company paid $16,500 to replace the engine to make the truck better by enabling it to operate using less expensive natural gas. Based on this information, the balance in the accumulated depreciation shown on the Year 3 balance sheet is:

Multiple Choice

$21,950.

$41,175.

$19,225.

$32,550.

Which of the following terms is used to describe long-term assets that have no physical substance and provide rights, privileges and special opportunities to businesses?

Multiple Choice

Intangible assets

Tangible assets

Natural resources

Property, plant and equipment

A machine with a book value of $38,000 is sold for $32,000. Which of the following answers would accurately represent the effects of the sale on the financial statements?

	Balance Sheet	Income Statement	Statement of Cash Flows
Assets	=	Liabilities	+	Stockholders Equity	Revenue/Gain		Expense	=	Net Income
A.	38,000		Not affected		38,000	38,000		Not affected		38,000	38,000 Investing activity
B.	(6,000)		Not affected		(6,000)	Not affected		6,000		(6,000)	6,000 Operating activity
C.	(6,000)		Not affected		(6,000)	Not affected		6,000		(6,000)	6,000 Investing activity
D.	(6,000)		Not affected		(6,000)	Not affected		6,000		(6,000)	32,000 Investing activity

Multiple Choice

Option D

Option B

Option A

Option C