Quiz
Ch 11 - ACCT 201A
Create a free account to finish this quiz
Save your progress and see your final score.
Already have an account? Sign in
Questions in this quiz (19)
1Falcon Company purchased a depreciable asset for $175,000. The estimated salvage value is $14,000, and the estimated useful life is 10 years. The straight-line method will be used for depreciation. What is the depreciation base of this asset?
- A$16,100
- B$17,500
- C$161,000
- D$175,000
2Slotkin Products purchased a machine for $65,000 on July 1, 2020. The company intends to depreciate it over 8 years using the double-declining balance method. Salvage value is $5,000. Depreciation for 2020 is
- A$32,500.
- B$8,125.
- C$14,219.
- D$15,000.
3Grover Corporation purchased a truck at the beginning of 2020 for $109,200. The truck is estimated to have a salvage value of $4,200 and a useful life of 120,000 miles. It was driven 21,000 miles in 2020 and 29,000 miles in 2021. What is the depreciation expense for 2020?
- A$19,845
- B$18,375
- C$25,375
- D$43,750
4On January 1, 2014, Forrest Company purchased equipment at a cost of $390,000. The equipment was estimated to have a salvage value of $12,000 and it is being depreciated over eight years under the sum-of-the-years'-digits method. What should be the charge for depreciation of this equipment for the year ended December 31, 2021?
- A$10,500
- B$10,833
- C$48,750
- D$47,250
5Orton Corporation, which has a calendar year accounting period, purchased a new machine for $80,000 on April 1, 2016. At that time Orton expected to use the machine for nine years and then sell it for $8,000. The machine was sold for $44,000 on Sept. 30, 2021. Assuming straight-line depreciation, no depreciation in the year of acquisition, and a full year of depreciation in the year of retirement, the gain to be recognized at the time of sale would be
- A$8,000.
- B$6,000.
- C$4,000.
- D$0.
6The composite rate of depreciation (in percent) for these assets is
- A8.94.
- B10.59.
- C8.57.
- D15.56.
7If 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 $120,000 and have been used for 10 years are sold for $36,000?
- ACash 36,000 D
AccumulatedDepreciation-PlantAssets 84,000 D
Plant Assets 120,000 cr - BCash 36,000
Loss on Sale of Plant Assets 84,000
Plant Assets 120,000 - CCash 36,000
Accumulated Depreciation - Plant Assets 90,000
Plant Assets 120,000
Gain on Sale of Plant Assets 6,000 - DCash 36,000
Plant Assets 36,000
- ACash 36,000 D
8Angst Company purchased equipment in January of 2011 for $400,000. The equipment was being depreciated on the straight-line method over an estimated useful life of 20 years, with no salvage value. At the beginning of 2021, when the equipment had been in use for 10 years, the company paid $50,000 to overhaul the equipment. As a result of this improvement, the company estimated that the useful life of the equipment would be extended an additional 5 years. What will be the depreciation expense recorded for this equipment in 2021?
- A$10,000
- B$16,667
- C$20,000
- D$13,333
9Piazza Co. purchased a machine on July 1, 2020, for $1,000,000. The machine has an estimated useful life of five years and a salvage value of $200,000. The machine is being depreciated from the date of acquisition by the 150% declining-balance method. For the year ended December 31, 2020, Piazza should record depreciation expense on this machine of
- A$300,000.
- B$200,000.
- C$150,000.
- D$120,000.
10A machine with an eight year estimated useful life and an estimated 10% salvage value was acquired on January 1, 2019. The depreciation expense for 2021 using the double-declining balance method would be original cost multiplied by
- A90% × 25% × 25%.
- B75% × 75% × 25%.
- C90% × 75% × 25%.
- D25% × 25%.
11On April 1, 2019, Verlin Co. purchased new machinery for $450,000. The machinery has an estimated useful life of five years, and depreciation is computed by the sum-of-the-years'-digits method. The accumulated depreciation on this machinery at March 31, 2021, should be
- A$300,000.
- B$270,000.
- C$180,000.
- D$150,000.
12.
- A$32,000
- B$48,000
- C$56,000
- D$64,000
13A depreciable asset has an estimated 15% salvage value. At the end of its estimated useful life, the accumulated depreciation would equal the original cost of the asset under which of the following depreciation methods?
Straight-line Productive Output- AYes No
- BYes Yes
- CNo Yes
- DNo No
14Net income is understated if, in the first year, estimated salvage value is excluded from the depreciation computation when using the
Straight-line Method Production or Use Method- AYes No
- BYes Yes
- CNo No
- DNo Yes
15A plant asset with a five-year estimated useful life and no residual value is sold at the end of the second year of its useful life. How would using the sum-of-the-years'-digits method of depreciation instead of the double-declining balance method of depreciation affect a gain or loss on the sale of the plant asset?
Gain Loss- ADecrease Decrease
- BDecrease Increase
- CIncrease Decrease
- DIncrease Increase
16Galt Company acquired a tract of land containing an extractable natural resource. Galt is required by the purchase contract to restore the land to a condition suitable for recreational use after it has extracted the natural resource. Geological surveys estimate that the recoverable reserves will be 5,000,000 tons, and that the land will have a value of $600,000 after restoration. Relevant cost information follows:
Land $6,400,000
Estimated restoration costs 1,200,000
If Galt maintains no inventories of extracted material, what should be the charge to depletion expense per ton of extracted material?- A$1.28
- B$1.40
- C$1.60
- D$1.52
17In January 2020, Fritz Mining Corporation purchased a mineral mine for $6,300,000 with removable ore estimated by geological surveys at 2,500,000 tons. The property has an estimated value of $600,000 after the ore has been extracted. Fritz incurred $1,725,000 of development costs preparing the property for the extraction of ore. During 2020, 585,000 tons were removed and 525,000 tons were sold. For the year ended December 31, 2020, Fritz should include what amount of depletion in its cost of goods sold?
- A$1,197,000
- B$1,333,800
- C$1,559,250
- D$1,737,000
18.
- A1-
(a) 2020: 25% × $500,000 × ¼ = $31,250
2021: 25% × $468,750 = $117,188
(b) 2020: 8/36 × $450,000 × ¼ = $25,000
2021: 8/36 × $450,000 × ¾ = $75,000
7/36 × $450,000 × ¼ = $21,875
$96,875
2-
Double-declining balance
2020 Depreciation $ 31,250
2021 Depreciation 117,188
Larger accumulated depreciation$148,438 DDB
2020 Depreciation $ 25,000
2021 Depreciation 96,875
$121,875 SYD - B0
- A1-
19.
- A(a) $90,000
———— = 9%
$1,000,000
(b)
Cash 15,000 D
Accumulated Depreciation-Equipment 10,000 D
Equipment 25,000 C - B0
- A(a) $90,000
Information
- Description
- Quiz on Ch 11 - ACCT 201A, created by Orfa Cartagena on 05/12/2020.
- Author
- Orfa Cartagena
- Language
- English
- Views
- 4
- Tags
- Rating
- No ratings yet Rate this quiz