Quiz

Question 1 (1 point)

Appa Apparel Corporation purchases another clothing manufacturer for $3,500,000 cash. Appa acquires all of the other company's identifiable assets ($4,000,000) and liabilities ($2,000,000). The journal entry to record this acquisition will include a debit to Goodwill of:

Question 1 options:

	$1,500,000
	$2,500,000
	$5,500,000
	$3,500,000

Question 2 (1 point)

Berger Consulting purchases office equipment for $20,000 on 1/1/20. Berger estimates that the equipment will have a useful life of 4 years and a residual value of $2,000 and calculates depreciation expense using the straight-line method. On 1/1/23 (i.e., after three years), Berger sells the office equipment for $5,000. The journal entry to record this disposal will include a:

Question 2 options:

	Loss on Sale of PP&E of $3,000
	Gain on Sale of PP&E of $3,000
	Gain on Sale of PP&E of $1,500
	Loss on Sale of PP&E of $1,500

Question 3 (1 point)

Straight Line depreciation and Double-Declining-Balance depreciation always result in the same Depreciation Expense in the final year of the asset's useful life.

Question 3 options:

	True
	False

Question 4 (1 point)

If Bader Bank Corp purchases a new computer system and pays the following related to the purchase: $2,000,000 for the system itself, $100,000 in sales taxes and $300,000 in installation fees. How much is capitalized into the PP&E account related to the purchase?

Question 4 options:

	$2,000,000
	$2,100,000
	$2,300,000
	$2,400,000

Question 5 (1 point)

Andrews Surgery Center purchases medical equipment for $200,000 on 1/1/20. Andrews initially estimates that the equipment will have a useful life of 5 years and a residual value of $20,000 and calculates depreciation expense using the straight-line method. On 1/1/22 (i.e., after two years), Andrews revises its estimate; the new total useful life is 4 years and the new residual value is $28,000. Andrews will record _____ in Depreciation Expense in 2023.

Question 5 options:

	$40,000
	$50,000
	$43,000
	$36,000

Question 6 (1 point)

If a company uses Double-Declining-Balance to calculate depreciation for tax purposes, they must also use Double-Declining-Balance to calculate depreciation for their financial statements.

Question 6 options:

	True
	False

Question 7 (1 point)

Goodwill is amortized straight-line over a useful life of 10 years.

Question 7 options:

	True
	False

Question 8 (1 point)

Research and development costs are always capitalized when they are incurred.

Question 8 options:

	True
	False

Question 9 (1 point)

Straight-Line depreciation and Double-Declining-Balance depreciation result in the same Accumulated Depreciation at the end of the asset's useful life.

Question 9 options:

	True
	False

Question 10 (1 point)

If a company makes a journal entry to record a PP&E Impairment, the entry will cause:

Question 10 options:

	Total Assets to Decrease
	Net Income to Increase
	Total Assets to Increase
	Total Liabilities to Increase

Question 11 (1 point)

We depreciate Land unless it contains natural resources.

Question 11 options:

	True
	False

Question 12 (1 point)

Murphy Glass purchases manufacturing equipment for $150,000 on 1/1/20. They estimate that the equipment has a useful life of 10 years and a $10,000 residual value. Accumulated Depreciation will be $_______ as of 12/31/22 (i.e., after three years), and 2022 Depreciation Expense will be $_______.

Question 12 options:

	12/31/22 Accumulated Depreciation = $42,000; 2022 Depreciation Expense = $14,000
	12/31/22 Accumulated Depreciation = $14,000; 2022 Depreciation Expense = $14,000
	12/31/22 Accumulated Depreciation = $42,000; 2022 Depreciation Expense = $42,000
	12/31/22 Accumulated Depreciation = $14,000; 2022 Depreciation Expense = $42,000