Chat with us, powered by LiveChat 1. A company buys equipment for $50,000, expects t - Writemia

1. A company buys equipment for $50,000, expects t

1. A company buys equipment for $50,000, expects to use it for Five years, and then sell it for $6,200. Using the straight-line method, the company should report annual depreciation for the equipment of:A. $20,020.B. $17,520.C. $10,000.D. $8,760.2. An asset is purchased on January 1 for $43,200. It is expected to have a useful life of four years after which it will have an expected residual value of $5,700. The company uses the straight-line method. If it is sold for $31,400 exactly two years after it is purchased, the company will record a:A. gain of $6,950.B. loss of $4,850.C. loss of $6,950.D. gain of $4,850.3. A truck costing $12,200, which has Accumulated Depreciation of $9,020, was sold for $2,020 cash. The entry to record this event would include a:A. credit to Accumulated Depreciation for $9,020.B. gain of $1,160.C. loss of $1,160.D. credit to the Vehicles account for $3,180.4. Accumulated Depreciation is classified as a(n):A. expense account.B. contra-asset account.C. liability account.D. stockholders’ equity account.5. An asset’s book value or carrying value is its:A. cost minus accumulated depreciation.B. cost minus salvage or residual value.C. cost minus salvage or residual value and accumulated depreciation.D. accumulated depreciation.6. The straight-line depreciation method:A. reports an equal amount of depreciation expense each year. B. reports a higher amount of depreciation expense in the early years of an asset’s use. C. reports more depreciation expense in a year when an asset is heavily used and less in a year when the asset is hardly used at all. D. can be used only by small companies.7. B. Darin Company purchased a truck and trailer for $54,000. The appraised values of the truck and trailer are $38,000 and $19,000, respectively. What is the amount of the cost that should be assigned to the trailer?A. $19,000 B. $18,000 C. $16,000 D. $22,0008. A company purchased property for $100,000. The property included a building, equipment and land. The building was appraised at $62,000, the land at $45,000, and the equipment at $18,000 for a total appraised value of $125,000. What is the amount of cost to be allocated to the building in the accounting records?A. $0 B. $49,600 C. $62,000 D. $100,0009. A company purchased office equipment for $24,500 and paid $1,470 in sales tax, $550 for installation, $3,200 for a needed adjustment to the equipment, and $2,600 for supplies that will be used for periodic routine maintenance. How should the company record this transaction?A. Debit Equipment $24,500, debit Repairs and Maintenance Expense for $5,220, debit Supplies for $2,600, and credit Cash for $32,320 B.Debit Equipment for $29,720, debit Supplies for $2,600, and credit Cash for $32,320 C. Debit Equipment for $25,970, debit Repairs and Maintenance Expense $3,750, debit Supplies for $2,600, and credit Cash for $32,320 D. Debit Equipment and credit Cash for $32,32010. A gain on the disposal of an asset occurs when the:A. asset’s book value is greater than the selling price. B. asset’s cost is greater than the asset’s accumulated depreciation. C. selling price is greater than the asset’s book value. D. accumulated depreciation is greater than the asset’s book value.

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