Financial Chap 7

1. 1This company purchased a semi truck at the beginning of 2011 at a cost of $220,000. The truck had an estimated life of 10 years, an estimated residual value of $20,000, and will be depreciated using the straight-line method. On January 1, 2013, the company made major repairs of $78,000 to the truck that extended the useful life. Thus, starting with 2013, the truck has a remaining life of 10 years and a new salvage value of $8,000.
   What is the truck's book value at December 31, 2013?

   1. A$162,000
   2. B$180,000
   3. C$258,000
   4. D$233,000
2. 2This company purchased a semi truck at the beginning of 2011 at a cost of $220,000. The truck had an estimated life of 10 years, an estimated residual value of $20,000, and will be depreciated using the straight-line method. On January 1, 2013, the company made major repairs of $78,000 to the truck that extended the useful life. Thus, starting with 2013, the truck has a remaining life of 10 years and a new salvage value of $8,000.
   What amount should be recorded as depreciation expense each year starting in 2013?

   1. A$21,500
   2. B$18,000
   3. C$25,000
   4. D$12,000
3. 3Research and development costs are

   1. ATreated as an expense when incurred
   2. BCapitalized but not amortized
   3. CCapitalized and amortized over the periods that will probably benefit from the research and development
   4. DIncluded with the cost of the patent resulting from the research and development.
4. 4Depreciation is

   1. AThe difference between the original cost and salvage value of an asset.
   2. BAn accumulation of fund to replace the related plant asset.
   3. Can effort to achieve proper matching of the cost of operating assets with related revenues
   4. Dthe cash allocated each period to maintain a plant asset.
5. 5Capitalizing an expenditure (making it an asset) rather than recording it as a revenue expenditure

   1. Aimpacts the total book value of plant assets on the balance sheet, but has no effect on the amount of net income reported during an accounting period.
   2. Bimpacts the amount of net income reported during an accounting period, but has no effect on the total book value of plant assets on the balance sheet.
   3. CImpacts the total book value of plant assets reported on the balance sheet and the amount on net income reported during a period.
   4. Dhas no impact on the book value of plant assets on the balance sheet or the amount of income reported on the income statement.
6. 6On January 1, 2012, a company sold a machine for $7,050 that it had used for several years. The machine cost $15,250, and had accumulated depreciation of $8,500 at the time of sale. What gain of loss will be reported on the income statement for the sale of the machine?

   1. AGain of $300
   2. BLoss of $300
   3. CGain of $6,450
   4. DLoss of $8,500
7. 7Current accounting standards indicate that the costs of intangible assets with an indefinite life, such as good will, should

   1. Abe reported on the statement of retained earnings in the year in which aquired
   2. Bbe debited to an expense account entirely in the year in which acquired
   3. Cbe amortized over a reasonable period of time not to exceed 40 years
   4. Dnot to be amortized, but should be reviewed annually for impairment
8. 8A company purchased a patent for $238,000 at the beginning of 2012 which it believes has an expected useful life of 10 years. The patent has a legal life of 20 years. How much amortization expense should be recorded in 2012?

   1. A$214,200
   2. B$0
   3. C$23,800
   4. D$15,867
9. 9The following costs were incurred to acquire and prepare land for a new parking lot: Purchase price of land, $1,950,00; cost to clear the land, $47,000; cost of paving, $15,000; and cost of lighting for the parking lot, $26,000. How much should be recorded in the land improvement account

   1. A$104,000
   2. B$41,000
   3. C$88,000
   4. D$15,000
10. 10A company purchased a building for $750,000 on January 1, 2013. The building is being depreciated of 40 years with an estimated residual value of $100,000. What will be the book value of the building in 10 years

    1. A$587,500
    2. B$600,000
    3. C$657,000
    4. D$700,000

Description

Quiz on Financial Chap 7 , created by Nicholas Stenquist on 12/12/2015.

Author

Nicholas Stenquist

Language

English

Views

0

Rating

No ratings yet

Rate this quiz

Rate this quiz

More on Depreciation