QUIZ chapter Câu hỏi The depreciable cost of a building is the same as its acquisition cost Select one: True False Câu hỏi The book value of a fixed asset reported on the balance sheet represents its market value on that date Select one: True False Câu hỏi A machine with a cost of $120,000 has an estimated residual value of $15,000 and an estimated life of years or 15,000 hours It is to be depreciated by the units-of-output method What is the amount of depreciation for the second full year, during which the machine was used 5,000 hours? Select one: a $21,000 b $35,000 c $5,000 d $45,000 Câu hỏi The acquisition costs of property, plant, and equipment should include all normal, reasonable and necessary costs to get the asset in place and ready for use Select one: True False Câu hỏi When a plant asset is traded for another similar asset, losses on the asset traded are not recognized Select one: True False Câu hỏi Which of the following is included in the cost of constructing a building? Select one: a cost of repairing vandalism damage during construction b cost of paving the parking lot c cost of removing the demolished building existing on the land when it was purchased d insurance costs during construction Câu hỏi Factors contributing to a decline in the usefulness of a fixed asset may be divided into the following two categories Select one: a physical and functional b functional and residual c salvage and functional d residual and salvage Câu hỏi When land is purchased to construct a new building, the cost of removing any structures on the land should be charged to the building account Select one: True False Câu hỏi Falcon Company acquired an adjacent lot to construct a new warehouse, paying $40,000 and giving a short-term note for $410,000 Legal fees paid were $13,275, delinquent taxes assessed were $14,500, and fees paid to remove an old building from the land were $15,800 Materials salvaged from the demolition of the building were sold for $6,800 A contractor was paid $890,000 to construct the new warehouse What is the cost of the land to be reported on the balance sheet? Select one: a $450,000 b $486,775 c $493,575 d $443,200 Câu hỏi 10 When the amount of use of a fixed asset varies from year to year, the method of determining depreciation expense that best matches allocation of cost with revenue is Select one: a double-declining-balance method b units-of-output method c straight-line method d MACRS Câu hỏi 11 When depreciation estimates are revised, all years of the asset's life are affected Select one: True False Câu hỏi 12 When a company establishes an outstanding reputation and has a competitive advantage because of it, the company should record goodwill on its financial statements Select one: True False Câu hỏi 13 The amount of the depreciation expense for the second full year of use of a fixed asset costing $100,000, with an estimated residual value of $5,000 and a useful life of years, is $25,000 by the doubledeclining-balance method Select one: True False Câu hỏi 14 What is the depreciation, for the year of acquisition and for the following year of a fixed asset acquired on October for $500,000, with an estimated life of years, and residual value of $50,000, using the straight-line method Assume a fiscal year ending December 31 Select one: a Yr of acquisition: $90,000; following year: $90,000 b Yr of acquisition: $50,000; following year: $90,000 c Yr of acquisition: $22,500; following year: $180,000 d Yr of acquisition: $22,500; following year: $90,000 Câu hỏi 15 Assume the following facts related to a land purchase: Land purchase price Broker's commission Payment for demolition and removal of $178,000 15,000 5,000 existing building Cash received from the sale of materials salvaged from the demolished building 2,000 Select one: a $178,000 b $180,000 c $196,000 d $193,000 Câu hỏi 16 An asset was purchased for $58,000 and originally estimated to have a useful life of 10 years with a residual value of $3,000 After two years of straight-line depreciation, it was determined that the remaining useful life of the asset was only years with a residual value of $2,000 What will be the annual depreciation for the asset? Select one: a $23,500 b $5,800 c $5,500 d $22,500 Câu hỏi 17 Which of the following is an example of a capital expenditure? Select one: a replacing an engine in a company car b tune-up for a company truck c replacing all burned-out light bulbs in the factory d cleaning the carpet in the front room Câu hỏi 18 The proper journal entry to purchase a computer costing $975 on account to be utilized within the business would be Select one: a Office Equipment Accounts Payable b Office Equipment Accounts Receivable 975 975 975 975 c Office Supplies Accounts Payable 975 d Office Supplies Accounts Receivable 975 Câu hỏi 975 975 19 When a company discards machinery that is fully depreciated, this transaction would be recorded with the following entry Select one: a debit Cash; credit Accumulated Depreciation b debit Depreciation Expense; credit Accumulated Depreciation c debit Accumulated Depreciation; credit Machinery d debit Machinery; credit Accumulated Depreciation Câu hỏi 20 On April 15, Compton Co paid $2,800 to upgrade a delivery truck and $125 for an oil change What account(s) would be debited for the upgrade to delivery truck and oil change? Select one: a Delivery Truck and Repairs and Maintenance Expense b Repairs and Maintenance Expense and Truck Repairs Expense c Repairs and Maintenance Expense d Delivery Truck Câu hỏi 21 The cost of replacing an engine in a truck is an example of ordinary maintenance Select one: True False Câu hỏi 22 The following information was taken from a recent annual report of Harrison Company (in millions): Land and buildings Machinery, equipment, and internal-use software Office furniture and equipment Other fixed assets related to leases Accumulated depreciation and amortization Select one: Current Year Preceding Year $726 $361 595 470 94 81 760 569 894 644 a Current year: $1,281; preceding year: $837 b Current year: $1,281; preceding year: $1,481 c Current year: $2,175; preceding year: $1,481 d Current year: $2,175; preceding year: $837 Câu hỏi 23 The amount of depreciation expense for the first full year of use of a fixed asset costing $95,000, with an estimated residual value of $5,000 and a useful life of years, is $19,000 by the straight-line method Select one: True False Câu hỏi 24 The difference between the balance in a fixed asset account and its related accumulated depreciation account is the asset's book value Select one: True False Câu hỏi 25 Which of the following should be included in the acquisition cost of a piece of equipment? Select one: a testing costs prior to placing the equipment into production b transportation costs c all of these d installation costs Câu hỏi 26 A machine costing $57,000 with a 6-year life and $54,000 depreciable cost was purchased January Compute the yearly depreciation expense using straight-line depreciation Select one: a $9,000 b $10,800 c $11,400 d $9,500 Câu hỏi 27 Equipment purchased at the beginning of the fiscal year for $360,000 is expected to have a useful life of years, or 14,000 operating hours, and a residual value of $10,000 Assume 1,200 hours were used the first year and 2,250, the second year What is the first-year depreciation for straight-line (SL), doubledeclining balance (DDB) and units-of-output (UOO) methods? Select one: a SL: $72,000; DDB: $140,000; UOO: $56,250 b SL: $70,000, DDB: $144,000; UOO: $30,000 c SL: $72,000; DDB: $144,000; UOO: $30,000 d SL: $70,000; DDB: $140,000; UOO: $30,000 Câu hỏi 28 Though a piece of equipment is still being used, the equipment should be removed from the accounts if it has been fully depreciated Select one: True False Câu hỏi 29 A machine with a cost of $75,000 has an estimated residual value of $5,000 and an estimated life of years or 18,000 hours What is the amount of depreciation for the second full year, using the doubledeclining-balance method? Select one: a $37,500 b $17,500 c $16,667 d $18,750 Câu hỏi 30 The cost of new equipment is called a revenue expenditure because it will help generate revenues in the future Select one: True False Câu hỏi 31 On December 31, Strike Company sold one of its batting cages for $50,000 The equipment had an original cost of $310,000 and has accumulated depreciation of $260,000 Depreciation has been recorded up to the end of the year What is the amount of the gain or loss on this transaction? Select one: a gain of $50,000 b loss of $50,000 c cannot be determined d no gain or loss Câu hỏi 32 Classify each of the following as: Adding refrigerant to an air conditioning system Installing a new air conditioning system in an old building Overhauling an engine in a large truck New landscaping Exterior and interior painting Fixing damage due to a car accident Paving a new parking lot Resurfacing a pool in an apartment building Câu hỏi Answer Ordinary maintenance and repairs Answer Asset improvements Answer Extraordinary repairs Answer Asset improvements Answer Ordinary maintenance and repairs Answer Ordinary maintenance and repairs Answer Asset improvements Answer Extraordinary repairs 33 When selling a piece of equipment for cash, a loss will result when the proceeds of the sale are less than the book value of the asset Select one: True False Câu hỏi 34 A used machine with a purchase price of $77,000, requiring an overhaul costing $8,000, installation costs of $5,000, and special acquisition fees of $3,000, would have a cost basis of Select one: a $93,000 b $90,000 c $85,000 d $82,000 Câu hỏi 35 On June 1, Aaron Company purchased equipment at a cost of $120,000 that has a depreciable cost of $90,000 and an estimated useful life of years and 30,000 hours, which ends on December 31 Using straight-line depreciation, calculate depreciation expense for the final (partial) year of service Select one: a $30,000 b $12,500 c $40,000 d $17,500 Câu hỏi 36 Fixed assets are ordinarily presented on the balance sheet Select one: a in a separate section along with intangible assets b at cost less accumulated depreciation c at current market values d at replacement costs Câu hỏi 37 If a fixed asset, such as a computer, were purchased on January for $3,750 with an estimated life of years and a salvage or residual value of $150, the journal entry for monthly expense under straight-line depreciation is Select one: a Accumulated Depreciation Depreciation Expense b Depreciation Expense Accumulated Depreciation c Depreciation Expense Accumulated Depreciation d Accumulated Depreciation Depreciation Expense Câu hỏi 100 100 1,200 1,200 100 100 1,200 1,200 38 Copy equipment was acquired at the beginning of the year at a cost of $72,000 that has an estimated residual value of $9,000 and an estimated useful life of years It is estimated that the machine will output an estimated 1,000,000 copies This year, 315,000 copies were made What is the units-of-output depreciation for the year? Select one: a $22,050 b $18,900 c $22,680 d $19,845 Câu hỏi 39 The amount of depreciation expense for a fixed asset costing $95,000, with an estimated residual value of $5,000 and a useful life of years or 20,000 operating hours, is $21,375 by the units-of-output method during a period when the asset was used for 4,500 hours Select one: True False Câu hỏi 40 On June 1, Michael Company purchased equipment at a cost of $120,000 that has a depreciable cost of $90,000 and an estimated useful life of years or 30,000 hours Using straight-line depreciation, calculate depreciation expense for the second year Select one: a $17,500 b $12,500 c $40,000 d $30,000 ... Year $726 $361 595 47 0 94 81 760 569 8 94 644 a Current year: $1,281; preceding year: $837 b Current year: $1,281; preceding year: $1 ,48 1 c Current year: $2,175; preceding year: $1 ,48 1 d Current year:... Select one: a SL: $72,000; DDB: $ 140 ,000; UOO: $56,250 b SL: $70,000, DDB: $ 144 ,000; UOO: $30,000 c SL: $72,000; DDB: $ 144 ,000; UOO: $30,000 d SL: $70,000; DDB: $ 140 ,000; UOO: $30,000 Câu hỏi 28... What is the cost of the land to be reported on the balance sheet? Select one: a $45 0,000 b $48 6,775 c $49 3,575 d $44 3,200 Câu hỏi 10 When the amount of use of a fixed asset varies from year to year,