Question 1

1pts

Helmway Company purchased equipment and these costs were incurred:

Cash price $21,500

Sales taxes $1,800

Insurance during transit $320

Installation and testing $430

Total costs $24,050

Presto will record the acquisition cost of the equipment as

$21,500

$23,300

$23,620

$24,050

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Question 2

1pts

2. Which one of the following items isnota consideration when recording periodic depreciation expense on plant assets?

salvage value

estimated useful life

cost to replace the asset

cost

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Question 3

1pts

The book value of an asset is equal to the

asset's market value less its historical cost.

blue book value relied on by secondary markets.

replacement cost of the asset.

asset's cost less accumulated depreciation.

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Question 4

1pts

A company purchased factory equipment on March 1, 2012 for $64,000. It is estimated that the equipment will have an $8,000 salvage value at the end of its 10-year useful life. Using the straight-line method of depreciation, the amount to be recorded as depreciation expense at December 31, 2012 is

5600

4667

6400

4800

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Question 5

1pts

A company purchased office equipment for $40,000 and estimated a salvage value of $8,000 at the end of its 6-year useful life. The constant percentage to be applied against book value each year if the double-declining-balance method is used is

17%

20%

25%

33%

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Question 6

1pts

A factory machine was purchased for $75,000 on January 1, 2010. It was estimated that it would have a $15,000 salvage value at the end of its 5-year useful life. It was also estimated that the machine would be run 40,000 hours in the 5 years. The company ran the machine for 5,000 actual hours in 2010. If the company uses the units-of-activity method of depreciation, the amount of depreciation expense for 2010 would be

6,000

7,500

12,000

15,000

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Question 7

1pts

A company purchased factory equipment for $250,000. It is estimated that the equipment will have a $25,000 salvage value at the end of its estimated 10-year useful life. If the company uses the double-declining-balance method of depreciation, the amount of annual depreciation recorded for the second year after purchase would be

36,000

40,000

45,000

50,000

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Question 8

1pts

The declining-balance method of depreciation produces

a decreasing depreciation expense each period.

an increasing depreciation expense each period.

a declining percentage rate each period.

a constant amount of depreciation expense each period.

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Question 9

1pts

A truck that cost $36,000 and on which $30,000 of accumulated depreciation has been recorded was disposed of for $5,000 cash. The entry to record this event includes a

credit to a gain of $1,000.

credit to a loss of $1,000.

credit to the Truck account for $36,000.

credit to Accumulated Depreciation for $30,000.

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Question 10

1pts

If disposal of a plant asset occurs during the year, depreciation is

not recorded for the year.

recorded for the whole year.

not recorded if the asset is scrapped.

recorded for the fraction of the year to the date of the disposal.