FA chapter 7 quick check

Descripción

Test sobre FA chapter 7 quick check, creado por meli ssa el 19/02/2019.
meli ssa
Test por meli ssa, actualizado hace más de 1 año
meli ssa
Creado por meli ssa hace alrededor de 5 años
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Resumen del Recurso

Pregunta 1

Pregunta
Bretman, Inc., purchased a tract of land, a small office building, and some equipment for $1,800,000. The appraised value of the land was $1,420,000, the building $650,000, and the equipment $430,000. What is the cost of the land?
Respuesta
  • $600,000
  • $1,022,400
  • $1,420,000
  • None of the above

Pregunta 2

Pregunta
Which statement is false?
Respuesta
  • Depreciation is based on the matching principle because it matches the cost of the asset with the revenue generated over the asset’s useful life.
  • Depreciation is a process of allocating the cost of a PPE over its useful life.
  • . Depreciation creates a fund to replace the asset at the end of its useful life
  • The cost of a PPE minus accumulated depreciation equals the asset’s book value

Pregunta 3

Pregunta
On July 1, 20X6, Amir Communications purchased a new piece of equipment that cost $65,000. The estimated useful life is 10 years and estimated residual value is $5,000. 3. What is the depreciation expense for 20X6 if Amir uses the straight-line method?
Respuesta
  • $3,000
  • . $6,000
  • $3,250
  • $6,500

Pregunta 4

Pregunta
On July 1, 20X6, Amir Communications purchased a new piece of equipment that cost $65,000. The estimated useful life is 10 years and estimated residual value is $5,000. Assume Amir Communications purchased the equipment on January 1, 20X6. If Amir uses the straight-line method for depreciation, what is the asset’s book value at the end of 20X7?
Respuesta
  • $54,000
  • $59,000
  • $48,000
  • $53,000

Pregunta 5

Pregunta
On July 1, 20X6, Amir Communications purchased a new piece of equipment that cost $65,000. The estimated useful life is 10 years and estimated residual value is $5,000. Assume Amir Communications purchased the equipment on January 1, 20X6. If Amir uses the double-declining-balance method, what is the depreciation for 20X7?
Respuesta
  • $13,000
  • $10,400
  • $12,000
  • . $9,600

Pregunta 6

Pregunta
On July 1, 20X6, Amir Communications purchased a new piece of equipment that cost $65,000. The estimated useful life is 10 years and estimated residual value is $5,000. Return to Amir’s original purchase date of July 1, 20X5. Assume that Amir uses the straight-line method of depreciation and sells the equipment for $44,500 on July 1, 20X9. The result of the sale of the equipment is a gain (loss) of
Respuesta
  • $3,500
  • $8,500.
  • $ (15,500).
  • $0

Pregunta 7

Pregunta
. A company bought a new machine for $30,000 on January 1. The machine is expected to last five years and has a residual value of $6,000. If the company uses the doubledeclining-balance method, accumulated depreciation at the end of year 2 will be
Respuesta
  • . $12,000
  • $9,600.
  • . $19,200.
  • $15,360.

Pregunta 8

Pregunta
Which of the following is not a capital expenditure?
Respuesta
  • A complete overhaul of an air-conditioning system
  • . Replacement of an old motor with a new one in a piece of equipment
  • The cost of installing a piece of equipment
  • The addition of a building wing
  • A tune-up of a company vehicle

Pregunta 9

Pregunta
Which of the following assets is not subject to a decreasing book value through depreciation, depletion, or amortization?
Respuesta
  • Goodwill
  • Land improvements
  • . Natural resources
  • Intangibles

Pregunta 10

Pregunta
Why would a business select an accelerated method of depreciation for tax purposes?
Respuesta
  • Accelerated depreciation will result in higher gain on disposal of PPE than straight-line depreciation.
  • Accelerated depreciation generates a greater amount of depreciation over the life of the asset than does straight-line depreciation.
  • Accelerated depreciation is easier to calculate because salvage value is ignored
  • Accelerated depreciation generates higher depreciation expense immediately, and therefore lowers tax payments in the early years of the asset’s life.

Pregunta 11

Pregunta
A company purchased an oil well for $270,000. It estimates that the well contains 100,000 barrels, has an eight-year life, and has no salvage value. If the company extracts and sells 20,000 barrels of oil in the first year, how much depletion expense should be recorded?
Respuesta
  • $33,750
  • $54,000
  • $27,000
  • $67,500

Pregunta 12

Pregunta
Which item among the following is not an intangible asset?
Respuesta
  • A copyright
  • A patent
  • A trademark
  • Goodwill
  • All of the above are intangible assets.
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