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Part 3 - 165B

Mahmoud Hemood 14 questions

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Questions in this quiz (14)

  1. 1A schedule of machinery owned by Micco Co. is presented below:
    Estimated Estimated
    Total Cost Salvage Value Life in Years
    Machine X $300,000 $20,000 12
    Machine Y 400,000 40,000 10
    Machine Z 150,000 30,000 6
    Micco computes depreciation by the composite method.

    30. The composite life (in years) for these assets is
    1. Ad. 10.0.
    2. Bc. 8.9.
  2. 2 31. If Labor, Inc. uses the composite method and its composite rate is 7.5% per year, what entry should it make when plant assets that originally cost $80,000 and have been used for 10 years are sold for $24,000?
    1. Ad. Cash 24,000
      Plant Assets 24,000
    2. Ba. Cash 24,000
      Accumulated Depreciation - Plant Assets 56,000
      Plant Assets 80,000
  3. 3Asset Cost Salvage Estimated Useful Life
    A $140,000 $14,000 10 years
    B 75,000 7,500 5 years
    C 164,000 8,000 12 years

    What is the composite depreciation rate of Exiter's assets?
    1. Ad. 11.1%
    2. Bb. 10.3%
  4. 4Asset Cost Salvage Estimated Useful Life
    A $140,000 $14,000 10 years
    B 75,000 7,500 5 years
    C 164,000 8,000 12 years

    What is the composite life of Exiter's assets?
    1. Ac. 8.9 years
    2. Bd. 10.3 years
  5. 5Asset Cost Salvage Estimated Useful Life
    A $140,000 $14,000 10 years
    B 75,000 7,500 5 years
    C 164,000 8,000 12 years

    Lynne Corporation acquired a patent on May 1, 2014. Lynne paid cash of $45,000 to the seller. Legal fees of $1,000 were paid related to the acquisition. What amount should be debited to the patent account?
    1. Ad. $46,000
    2. Bb. $44,000
  6. 6The general ledger of Vance Corporation as of December 31, 2015, includes the following accounts:
    Copyrights $ 30,000
    Deposits with advertising agency (will be used to promote goodwill) 27,000
    Discount on bonds payable 70,000
    Excess of cost over fair value of identifiable net assets of
    Acquired subsidiary 480,000
    Trademarks 90,000
    In the preparation of Vance's balance sheet as of December 31, 2015, what should be reported as total intangible assets?
    1. Ad. $627,000.
    2. Bc. $600,000.
  7. 7Dennis Company purchases Miles Company for $4,200,000 cash on January 1, 2015. The book value of Miles Company's net assets reported on its December 31, 2014 financial statement was $3,800,000. An analysis indicated that the fair value of Miles's tangible assets exceeded the book value by $600,000, and the fair value of identifiable intangible assets exceeded book value by $320,000. What amount of gain or goodwill is recognized by Dennis?
    1. Ac. $520,000 gain.
    2. Bd. $520,000 goodwill.
  8. 8MaBelle Corporation incurred the following costs in 2015:
    Acquisition of R&D equipment with a useful life of
    4 years in R&D projects $800,000
    Start-up costs incurred when opening a new plant 140,000
    Advertising expense to introduce a new product 700,000
    Engineering costs incurred to advance a product to full
    production stage 500,000
    What amount should MaBelle record as research & development expense in 2015?
    1. Ac. $1,300,000
    2. Ba. $ 700,000
  9. 9Greeson Corp. signed a three-month, zero-interest-bearing note on November 1, 2014 for the purchase of $250,000 of inventory. The face value of the note was $253,900. Assuming Greeson used a “Discount on Note Payable” account to initially record the note and that the discount will be amortized equally over the 3-month period, the adjusting entry made at December 31, 2014 will include a
    1. Ac. credit to Discount on Note Payable for $1,300.
    2. Bb. debit to Interest Expense for $2,600.
  10. 10On February 10, 2014, after issuance of its financial statements for 2013, Higgins Company entered into a financing agreement with Cleveland Bank, allowing Higgins Company to borrow up to $6,000,000 at any time through 2016. Amounts borrowed under the agreement bear interest at 2% above the bank's prime interest rate and mature two years from the date of loan. Higgins Company presently has $2,250,000 of notes payable with Star National Bank maturing March 15, 2014. The company intends to borrow $3,750,000 under the agreement with Cleveland and liquidate the notes payable to Star National Bank. The agreement with Cleveland also requires Higgins to maintain a working capital level of $9,000,000 and prohibits the payment of dividends on common stock without prior approval by Cleveland Bank. From the above information only, the total short-term debt of Higgins Company as of the December 31, 2013 balance sheet date is
    1. Ab. $2,250,000.
    2. Bd. $6,000,000

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165B Quiz on Part 3 - 165B, created by Mahmoud Hemood on 27/04/2020.
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