Question :
41) A revision of an estimate which will extend the : 1230205
41) A revision of an estimate which will extend the asset’s useful life is called a change in accounting:
A) theory.
B) policy.
C) procedure.
D) estimate.
42) When an asset is fully depreciated:
A) the total depreciation is equal to the accumulated depreciation, and the asset has reached the end of its actual useful life.
B) the book value is equal to the salvage value, and the asset has reached the end of its estimated useful life.
C) the depreciable cost is equal to the salvage value, and the asset is of no further use to the company.
D) the book value is zero, and the asset has no market value.
43) Depreciation for tax purposes:
A) must be the same as depreciation for financial statement purposes.
B) is based on the objective of providing useful information for making economic decisions.
C) can help conserve cash for the business.
D) generally will be lower than depreciation for financial statement purposes.
44) Under the modified accelerated cost recovery system, all of the following are true EXCEPT that:
A) assets are grouped into classes.
B) most real estate is depreciated using the straight-line method.
C) for a given class, the depreciation is computed using a declining-balance method.
D) MACRS can only be used for financial reporting purposes.
45) When computing depreciation for a partial year:
A) many companies record a full month’s depreciation if the asset was purchased after the 15th of the month.
B) companies are required to compute depreciation on a daily basis.
C) the straight-line method automatically adjusts for partial periods.
D) the units-of-production method automatically adjusts for partial periods.
46) On January 2, 2011, KJ Corporation acquired equipment for $260,000. The estimated life of the equipment is 5 years or 40,000 hours. The estimated residual value is $20,000. If KJ Corporation uses the units of production method of depreciation, what will be the debit to Depreciation Expense for the year ended December 31, 2012, assuming that during this period, the asset was used 8,250 hours?
A) $48,000
B) $49,500
C) $51,500
D) $53,625
8,250 hours*6 per hour = 49,500 total deprecation for the year
47) On January 2, 2011, KJ Corporation acquired equipment for $260,000. The estimated life of the equipment is 5 years or 40,000 hours. The estimated residual value is $20,000. What is the balance in Accumulated Depreciation on December 31, 2012, if KJ Corporation uses the straight-line method of depreciation?
A) $96,000
B) $49,500
C) $51,500
D) $53,625
48) On January 2, 2011, KJ Corporation acquired equipment for $260,000. The estimated life of the equipment is 5 years or 40,000 hours. The estimated residual value is $20,000. What is the book value of the asset on December 31, 2012, if KJ Corporation uses the straight-line method of depreciation?
A) $80,000
B) $96,000
C) $104,000
D) $164,000
49) On January 2, 2011, KJ Corporation acquired equipment for $260,000. The estimated life of the equipment is 5 years or 40,000 hours. The estimated residual value is $20,000. What is the balance in Accumulated Depreciation on December 31, 2011, if KJ Corporation uses the double-declining-balance method of depreciation?
A) $62,400
B) $88,000
C) $96,000
D) $104,000
50) On January 2, 2011, KJ Corporation acquired equipment for $260,000. The estimated life of the equipment is 5 years or 40,000 hours. The estimated residual value is $20,000. What is the balance in Accumulated Depreciation on December 31, 2012, if KJ Corporation uses the double-declining-balance method of depreciation?
A) $104,000
B) $38,400
C) $166,400
D) $208,000
