Question : 51.Jeter Inc. acquired machinery January 1, 2004 at a cost : 1253706

 

51.Jeter Inc. acquired machinery on January 1, 2004 at a cost of $55,000.  The machinery was depreciated over five years using the straight line method and a salvage value of $2,000.  In 2010 the machinery was sold for $3,000.  The income statement for 2010 will reflect which of the following:

                  Gain of $1,000

                  Gain of $3,000

                   Loss of $52,000

                  No gain or loss

52.On December 1, Douglas Corp. purchased a tract of land for $285,000 to be used as a factory site. An old unusable building on the land was razed (torn down), and the salvaged materials from the demolition were sold. These cash expenditures and receipts and other costs incurred during December are as follows:

Demolition of old building

$51,000

Proceeds from sale of salvaged materials

8,000

Legal fees to transfer land title

7,000

Title guarantee insurance

2,500

What would be the balance in Douglas’s Land account on its December 31 balance sheet?

                  $285,000

                  $337,500

                   $340,500

                  $331,000

 

53.Land and a building were purchased for $240,000. A reliable market value of the land is $75,000 and for the building, $225,000. What are the respective separate costs assigned to the land and building?

                  $75,000 and $225,000

                  $75,000 and $165,000

                   $60,000 and $180,000

                  $80,000 and $160,000

 

54.On January 1, Eagle Co. paid $65,000 for a new truck. It was estimated that the truck would be driven 300,000 miles during the next 5 years, at which time it would have a salvage value of $10,000. At the end of the first and second years, the odometer registered 55,000 and 115,000 miles, respectively. What is the book value of the truck using straight-line depreciation at the end of the second year?

     $47,000

     $43,000

      $43,533

     $56,000

 

 

 

 

 

 

 

55.On July 31, 2010, equipment is purchased for $66,000 with a 4-year life expectancy and salvage value of $5,000. If the double-declining-balance method is used, calculate depreciation expense for the year ending December 31, 2010.

     $13,750

     $12,708

      $33,000

     $31,000

 

56.On February 1, 2008, James Co., which uses straight-line depreciation, purchased equipment for $88,000 with a useful life of 12 years and $4,000 salvage value. On February 1, 2012, the equipment was sold for $56,000. Which of the following would James recognize as a result of this disposition?

     $7,000 loss

     $4,000 loss

      $4,000 gain

     No gain or loss

57.On January 1, Mondale Co. paid $92,000 for a new truck. It was estimated that the truck would be driven 200,000 miles during the next 8 years, at which time it would have a salvage value of $7,000. At the end of the first three years, the odometer registered 27,000, 53,000, and 78,000 miles, respectively. What is the book value of the truck using the activity method of depreciation at the end of the third year?

     $67,150

     $24,850

      $51,850

     $58,850

 

 

 

 

 

 

 

58.Farmdale Company purchased three assets for $400,000.  These assets have fair market values as follows:

Land$  75,000

Equipment125,000

Inventory 50,000

If you were Farmdale’s accountant, how much of the lump sum purchase would you allocate to the inventory?

     $100,000

     $120,000

      $200,000

     $80,000

59.Farmdale Company purchased three assets for $400,000.  These assets have fair market values as follows:

Land$  75,000

Equipment  125,000

Inventory     50,000

If you were Farmdale’s accountant, how much of the lump sum purchase would you allocate to the land?

a. $75,000

b. $120,000

c. $200,000

d. $80,000

60.Farmdale Company purchased three assets for $400,000.  These assets have fair market values as follows:

Land$  75,000

Equipment  125,000

Inventory     50,000

If you were Farmdale’s accountant, how much of the lump sum purchase would you allocate to the equipment?

     $100,000

     $120,000

      $200,000

     $80,000