1. Question 1 Caterpillars, Inc., a manufacturing company, acquired equipment on January 1, 2014 for $530,000. Estimated useful life of the equipment was seven years and the estimated residual value was $13,000. On January 1, 2017, after using the equipment for three years, the total estimated useful life has been revised to nine total years. Residual value remains unchanged. The company uses the straight-line method of depreciation. Calculate depreciation expense for 2017. (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.)
2. $50,476
3. $49,238
4. $58,889
5. $57,444

5 points

Question 2

1. On June 30, 2016, Colora Printers purchased a printer for $59,000. It expects the printer to last for four years and have a residual value of $8,000. Compute the depreciation expense on the printer for the year ended December 31, 2016, using the straight-line method. (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.)
2. $12,750
3. $6,375
4. $14,750
5. $7,438

5 points

Question 3

1. The cost of an asset is $1,160,000, and its residual value is $160,000. Estimated useful life of the asset is four years. Calculate depreciation for the first year using the double-declining-balance method of depreciation. (Do not round any intermediate calculations, and round your final answer to the nearest dollar.)
2. $500,000
3. $580,000
4. $290,000
5. $250,000

5 points

Question 4

1. Hastings Corporation has purchased a group of assets for $21,900. The assets and their relative market values are listed below.
3. Land$6,800Equipment2,500Building3,100
5. Which of the following amounts would be debited to the Land account? (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.)
6. $4,133
7. $12,045
8. $4,380
9. $5,475

5 points

Question 5

1. On January 1, 2017, Zade Manufacturing Corporation purchased a machine for $40,900,000. Zade's management expects to use the machine for 27,000 hours over the next six years. The estimated residual value of the machine at the end of the sixth year is $47,000. The machine was used for 3,900 hours in 2017 and 5,400 hours in 2018. What is the depreciation expense for 2017 if the corporation uses the units-of-production method of depreciation? (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.)
2. $5,900,973
3. $13,633,333
4. $8,170,578
5. $5,907,759

5 points

Question 6

1. Acer, Inc. plans to develop a shopping center. In the first quarter, the following amounts were spent:
3. Acquisition of land$16,000Surveys and legal fees1,200Land clearing1,100Fencing7,000Install lighting and signage1,760
5. What amount should be recorded as the cost of the land in the corporation's books?
6. $25,300
7. $18,300
8. $20,060
9. $24,100

5 points

Question 7

1. A photocopier cost $95,000 when new and has accumulated depreciation of $90,000. If the business discards this plant asset, the result is __________.
2. a loss of $5,000
3. a loss of $11,250
4. a gain of $5,000
5. a gain of $11,250

5 points

Question 8

1. Danube Corp. purchased a used machine for $21,000. The machine required installation costs of $6,000 and insurance while in transit of $700. At which of the following amounts would the machine be recorded?
2. $21,000
3. $27,000
4. $21,700
5. $27,700

5 points

Question 9

1. On January 1, 2016, Martini, Inc. acquired a machine for $1,030,000. The estimated useful life of the asset is five years. Residual value at the end of five years is estimated to be $87,000. What is the book value of the machine at the end of 2017 if the company uses the straight-line method of depreciation?
2. $618,000
3. $652,800
4. $565,800
5. $617,996

5 points

Question 10

1. Which of the following depreciation methods allocates a varying amount of depreciation each year based on an asset's usage?
2. The straight-line method
3. The annuity method
4. The units-of-production method
5. The double-declining-balance method

5 points

Question 11

1. Which of the following depreciation methods allocates a higher amount of depreciation in earlier years than in later years?
2. The units-of-production method
3. The straight-line method
4. The double-declining-balance method
5. The first-in, first-out method

5 points

Question 12

1. Westland, Inc. owns a delivery truck. Which of the following costs, associated with the truck, will be treated as a revenue expenditure?
2. Oil change and lubrication
3. Major engine overhaul
4. Modification for new use
5. Addition to storage capacity

5 points

Question 13

1. Which of the following requires businesses to record depreciation?
2. Revenue recognition principle
3. Matching principle
4. Cost principle
5. Going concern principle

5 points

Question 14

1. Which of the following is included in the cost of land?
2. Cost of fencing
3. Cost of paving
4. Brokerage commission
5. Cost of outdoor lighting

5 points

Question 15

1. Which of the following is included in the cost of a plant asset?
2. Amounts paid to make the asset ready for its intended use
3. Regular repair and maintenance costs
4. Replacement of damaged parts of the asset
5. Wages of workers who work use the asset in normal operations

5 points

Question 16

1. IFRS permits the presentation of plant assets at their fair market value because __________.
2. U. S. GAAP requires this presentation
3. fair market value may be more relevant
4. fair market value is easier to compute than book value
5. financial statements users are indifferent to how plant assets are presented

5 points

Question 17

1. The expected cash value of an asset at the end of its useful life is known as __________.
2. book value
3. residual value
4. carrying value
5. market value

5 points

Question 18

1. Roberts Construction Group paid $11,000 for a plant asset that had a market value of $20,500. At which of the following amounts should the plant asset be recorded?
2. $20,500
3. $5,500
4. $11,000
5. $22,000

5 points

Question 19

1. A company purchased a computer on July 1, 2017 for $50,000. Estimated useful life of the computer was five years, and it has no residual value. Which of the following methods should be used to best match its expense against the revenue it produces?
2. The units-of-production method
3. The straight-line method
4. The double-declining-balance method
5. The first-in, first-out method

5 points

Question 20

1. Fred, Inc. owns a delivery truck. Which of the following costs associated with the truck will be capitalized and depreciated?
2. Modification for new use
3. Change of oil filters
4. Replacement of tires
5. Normal engine repair