Pebble Beach Co. buys a plece of equipment for $60,000. The equipment has a useful life of six years. No residual value is expected at the end of the useful life. Using the double-declining-balance method, what is the company's depreciation expense in the first year of the equipment's useful life? (Do not round Intermediate calculations.) Multiple Choice $20.000 S15.000 $15.000 $10,000 S30000 A piece of equipment was acquired on January 1, 2018, at a cost of $44,000, with an estimated residual value of $2,000 and an estimated useful life of ten years. The company uses the double declining-balance method. What is its book value at December 31, 2019? Multiple Choice S28160 $8,400 8,800 S35,600 Why does the IRS allow larger depreciation amounts in the early years of an asset's life? 1 Multiple Choice The calculations are easier if you allow more depreciation in the early years of an asset's life. The government wants to encourage companies to invest in assets to promote economic renewal and growth. 0 So that most Income taxes are paid by average taxpayers, rather than by big corporations. 0 0 The calculations are more complicated, so it provides more jobs for accountants and thus stimulates the economy. The MegaHit Film Studio has a licensing right (or agreement) to distribute films produced by the Artsy Film Company. How would the MegaHit Company classify this licensing right? Multiple Choice Tangible asset Research and development o Intangible asset o pues set Fixed asset Grandview, Inc. uses the allowance method. At December 31, 2018, the company's balance sheet reports Accounts Receivable, Net in the amount of $19,000. On January 2, 2019. Grandview writes off a $1,900 customer account balance when it becomes clear that the customer will never pay. What is the amount of Accounts Receivable, Net after the write-off? 1 Multiple Choice $20.900 0 0 $17,100. 0 0 $19,000 0 $1,900 0 Kelton Inc. reported net credit sales of $320,000 for the current year. The unadjusted credit balance in its Allowance for Doubtful Accounts is $550. The company has experienced bad debt losses of 3% of credit sales in prior periods. Using the percentage of credit sales method, what amount should the company record as an estimate of Bad Debt Expense? Multiple Choice S1,650 S10150 S9,600 $2200 Using the aging method of accounts receivable method, $5,300 of the company's Accounts Receivable are estimated to be uncollectible. At the end of the year, the balance of Accounts Receivable is $103,000 and the unadjusted credit balance of the Allowance for Doubtful Accounts is! $560. Credit sales during the year totaled $156,000. What is the current year's Bad Debt Expense? Multiple Choice o S4740. o $7,300. o $5,300. o $7,860. On June 12, because management knew with near certainty that it had no chance of collection, Sheave Company wrote off a customer's account balance in the amount of $350. On November 3, the customer malled a payment for $350 to Sheave. To record the receipt of this payment from the customer, the company would debit: Multiple Choice Bad Debt Expense and credit Cash Accounts Receivable and credit Bad Debt Expense, and then debit Cash and credit Allowance for Doubtful Accounts Cash and credit Accounts Receivable. Accounts Receivable and credit Allowance for Doubtful Accounts, and then debit Cash and credit Accounts Receivable. Santiago Cleaners allows customers make purchases using their VISA credit cards. If customers purchase from Santiago using VISA credit cards, which of the following statements is correct? Multiple Choice VISA pays Santiago the full amount of purchase, without charging a fee. 0 VISA will wait until the customer makes payment to the credit card company until forwarding payment to Santiago Santiago does not have to collect directly from customers. 0 Santiago must bear any losses from uncollectible accounts 0
