Question :
Table 10-1
On January 1, 2013, Bark Manufacturing Company Ltd. purchased : 1212444
Table 10-1
On January 1, 2013, Bark Manufacturing Company Ltd. purchased a machine for $27,500, and expects to use the machine a total of 32,000 hours over the next four years. Bark set the residual value on the machine at $3,500. Bark used the machine 6,000 hours in 2013 and 7,200 hours in 2014.
21) Referring to Table 10-1, what is the amortization expense for 2013 if Bark uses double-declining-balance amortization?
A) $12,000
B) $13,750
C) $6,875
D) $6,000
22) Referring to Table 10-1, what is the amortization expense in 2014 if Bark uses straight-line amortization?
A) $6,875
B) $13,750
C) $12,000
D) $6,000
23) Referring to Table 10-1, what is the amortization expense in 2014 if Bark uses double-declining-balance amortization?
A) $6,875
B) $6,000
C) $13,750
D) $12,000
24) Referring to Table 10-1, what is the amortization expense in 2014 if Bark uses units-of-production amortization?
A) $5,400
B) $4,500
C) $6,192
D) $5,156
25) Which of the following statements is true?
A) Accumulated amortization is that portion of a property, plant, and equipment asset’s cost that has already been recorded as an expense.
B) Amortization is a process of valuation.
C) Amortization represents the cash a business has set aside to replace assets as they become fully amortized.
D) Accumulated amortization is classified as a liability account on the balance sheet.
26) To measure amortization for a property, plant, and equipment asset, all of the following must be known except:
A) estimated useful life.
B) historical cost.
C) current market value.
D) estimated residual value.
27) The entry to record amortization on a building is:
A)
Amortization Expense
Accumulated Amortization-Building
B)
Amortization Expense
Building
C)
Building Expense
Accumulated Building Expense
D)
Building Expense
Building
28) Book value is defined as:
A) cost minus residual value.
B) cost minus accumulated amortization.
C) current market value minus residual value.
D) current market value minus accumulated amortization.
29) Multiplying the asset’s book value by a constant percentage is the computation of amortization under:
A) the double-declining-balance method.
B) the units-of-production method.
C) the straight-line method.
D) either double-declining-balance method or straight-line method.
30) The amortization method that initially ignores residual value in the initial calculation is:
A) double-declining-balance.
B) straight-line.
C) both double-declining-balance and straight-line.
D) units-of-production.
Table 10-2
On January 1, 2013, Homes Realty Ltd. purchased a $45,000 vehicle to chauffeur clients to prospective homes. Homes plans on driving the vehicle for five years or 100,000 kilometres. Expected residual value is $10,000.
