Question :
121. Huffington Company traded in an old delivery truck for a : 1225153
121. Huffington Company traded in an old delivery truck for a new one. The old truck had a cost of $75,000 and accumulated depreciation of $60,000. The new truck had an invoice price of $125,000. Huffington was given a $12,000 trade-in allowance on the old truck, which meant they paid $113,000 in addition to the old truck to acquire the new truck. If this transaction has commercial substance, what is the recorded value of the new truck?
A. $15,000
B. $75,000
C. $113,000
D. $125,000
E. $128,000
122. A company bought a new display case for $42,000 and was given a trade-in of $2,000 on an old display case, so the company paid $40,000 cash with the trade-in. The old case had an original cost of $37,000 and accumulated depreciation of $34,000. If the transaction has commercial substance, the company should record the new display case at:
A. $2,000.
B. $3,000.
C. $40,000.
D. $42,000.
E. $43,000.
123. A company purchased a machine valued at $66,000. It traded in an old machine for a $9,000 trade-in allowance and the company paid $57,000 cash with the trade-in. The old machine cost $44,000 and had accumulated depreciation of $36,000. This transaction has commercial substance. What is the recorded value of the new machine?
A. $8,000.
B. $9,000.
C. $57,000.
D. $65,000.
E. $66,000.
124. All of the following statements regarding increases in the value of plant assets under U.S. GAAP and IFRS are True except:
A. U.S. GAAP prohibits companies to record increases in the value of plant assets.
B. IFRS permits upward asset revaluations.
C. Under IFRS, a company can reverse an impairment and record that increase in income.
D. Under U.S. GAAP, a company can reverse an impairment and can include it in comprehensive income.
E. Under IFRS, an impairment increase beyond as asset’s original cost can be recorded in comprehensive income.
125. Marble Company purchased a machine costing $120,000, terms 1/10, n/30. The machine was shipped FOB shipping point and freight charges were $2,000. The machine requires special mounting and wiring connections costing $10,000. When installing the machine, $1,300 in damages occurred. Materials costing $1,500 are used in testing and adjusting the machine to produce a satisfactory product. Compute the cost recorded for this machine assuming Marble paid within the discount period.
A. $131,100.
B. $134,800.
C. $132,300.
D. $133,600.
E. $130,300.
126. Salta Company installs a manufacturing machine in its factory at the beginning of the year at a cost of $87,000. The machine’s useful life is estimated to be 5 years, or 400,000 units of product, with a $7,000 salvage value. During its second year, the machine produces 84,500 units of product. Determine the machines’ second year depreciation under the straight-line method.
A. $16,900.
B. $16,000.
C. $17,400.
D. $18,379.
E. $20,880.
127. Salta Company installs a manufacturing machine in its factory at the beginning of the year at a cost of $87,000. The machine’s useful life is estimated to be 5 years, or 400,000 units of product, with a $7,000 salvage value. During its second year, the machine produces 84,500 units of product. Determine the machines’ second year depreciation under the double-declining-balance method.
A. $16,900.
B. $16,000.
C. $17,400.
D. $18,379.
E. $20,880.
128. Salta Company installs a manufacturing machine in its factory at the beginning of the year at a cost of $87,000. The machine’s useful life is estimated to be 5 years, or 400,000 units of product, with a $7,000 salvage value. During its second year, the machine produces 84,500 units of product. Determine the machines’ second year depreciation under the units-of-production method.
A. $16,900.
B. $16,000.
C. $17,400.
D. $18,379.
E. $20,880.
129. Salta Company installs a manufacturing machine in its factory at the beginning of the year at a cost of $87,000. The machine’s useful life is estimated to be 5 years, or 400,000 units of product, with a $7,000 salvage value. During its second year, the machine produces 84,500 units of product. What journal entry would be needed to record the machines’ second year depreciation under the units-of-production method?
A. Debit Depletion Expense $16,900; credit Accumulated Depletion $16,900.
B. Debit Depletion Expense $16,000; credit Accumulated Depletion $16,000.
C. Debit Depreciation Expense $16,900; credit Accumulated Depreciation $16,900.
D. Debit Depreciation Expense $16,000; credit Accumulated Depreciation $16,000.
E. Debit Amortization Expense $16,900; credit Accumulated Amortization $16,900.
130. Carmel Company acquires a mineral deposit at a cost of $5,900,000. It incurs additional costs of $600,000 to access the deposit, which is estimated to contain 2,000,000 tons and is expected to take 5 years to extract. Compute the depletion expense for the first year assuming 418,000 tons were mined.
A. $1,233,100.
B. $1,358,500.
C. $1,300,000.
D. $1,180,000.
E. $1,280,000.
