Question 27 (1.5 points)

Chia Pet, Inc. owns a machine that it uses in its manufacturing process. Chia purchased the machine 4 years ago for $100,000. The depreciation on the machine for the first 4 years was calculated using the straight line method with no residual and a 5 year useful life. In examining the machine, Chia determines that instead of lasting one more year, the machine has two more years of useful life. With the only change being the useful life, the journal entry to record depreciation for the fifth year (year the useful life change is identified) will include which of the following?

Question 27 options:

1)	Debit to Depreciation expense for $20,000

2)	Debit to Depreciation expense for $10,000

3)	Credit to Machine $10,000

4)	Credit to Accumulated depreciation for $20,000

Question 28 (1.5 points)

On a machine that cost $640,000 and has a useful life of 10 years, $40,000 residual value and was purchased at the beginning of the year, what amount of depreciation should be recorded in year 1 using the double declining balance method with no half year convention?

Question 28 options:

1)

$60,000

2)

$64,000

3)

$128,000

4)

$120,000

Question 29 (1.5 points)

Wholesome Corporation issued bonds with a face value of $200,000 with a 4 percent stated rate of interest on January 1. The effective rate of interest on that date was 6 percent and interest is paid annually on December 31. The bonds mature ten years from now. What amount would bondholders be willing to pay Krystal on January 1 for the bonds?

Question 29 options:

1)

$200,000

2)

$166,465

3)

$170,560

4)

$280,000

Question 30 (1.5 points)

Party, Inc. has five employees that have each worked 4 days since the last payroll period cutoff and thus have not been paid for those 4 days at the end of December. If each employee is paid $100 per day, what adjusting entry is needed to make the financial statements at the end of December reflect accrual accounting?

Question 30 options:

1)	Debit Wages Expense $400 credit Cash $400

2)	Debit Wages Payable $2,000 credit Cash $2,000

3)	Debit Wages Payable $2,000 credit Wages Expense $2,000

4)	Debit Wages Expense $2,000 credit Wages Payable $2,000

Question 32 (1.5 points)

Martin, Inc. purchased a piece of land for $30,000 on which it intended to build a warehouse. Two years later, Martin decided instead to lease an existing warehouse and sold the land for $40,000. Which of the following is true with regard to the sale of the land?

Question 32 options:

1)	The sale will result in a loss of $10,000 being recorded

2)	The sale will result in revenues of $40,000 being recorded

3)	The sale will result in a gain of $10,000 being recorded

4)	The sale will result in cost of goods sold of $30,000 being recorded