Question :
61.The following items represent common post acquisition expenditures incurred equipment.
A.An : 1241915
61.The following items represent common post acquisition expenditures incurred on equipment.
A.An overhaul to increase useful life of the equipment
B.Cost of a muffler to reduce equipment noise
C.Lubrication service
D.Costs of redesign to increase output
a.A only
b.A, B, and D
c.A and D
d.A and B
62.The following items represent common postacquisition expenditures incurred on equipment.
A.Replacement of defective parts
B.Rewiring costs to increase operating speed
C.Painting costs
D.Repair of the major circuitry of the equipment
a.A and C
b.C only
c.A, B, and C
d.A, C, and D
63.Rio Grande Company purchased equipment on January 1, 2015 for $75,000. The estimated useful life of the equipment is 5 years, the salvage value is $10,000, and the company uses the double-declining balance method to depreciate fixed assets. Which of the following journal entries would Rio Grande record if the equipment is scrapped after three years?
a.Equipment ……………………………….75,000
Gain on Disposal of Equipment ………………………16,200
Accumulated Depreciation—Equipment …………………58,800
b.Accumulated Depreciation—Equipment ………………58,800
Loss on Disposal of Equipment ………………………16,200
Equipment ……………………………….75,000
c.Accumulated Depreciation—Equipment ………………58,800
Cash16,200
Equipment ……………………………….75,000
d.Depreciation Expense………………………….58,800
Loss on Disposal of Equipment ………………………16,200
Equipment ……………………………….75,000
64.Rio Grande Company purchased equipment on January 1, 2015 for $75,000. The estimated useful life of the equipment is 5 years, the salvage value is $10,000, and the company uses the double-declining balance method to depreciate fixed assets. How much depreciation would Rio Grande record for the fourth year of the equipment’s use?
a.$6,480
b.$6,200
c.$5,616
d.$6,000
65.Rio Grande Company purchased equipment on January 1, 2015 for $75,000. The estimated useful life of the equipment is 5 years, the salvage value is $10,000, and the company uses the double-declining balance method to depreciate fixed assets. Which of the following journal entries would Rio Grande record if the equipment is scrapped after five years?
a.Equipment ……………………………….75,000
Gain on Disposal of Equipment ………………………10,000
Accumulated Depreciation—Equipment …………………65,000
b.Accumulated Depreciation—Equipment ………………75,000
Equipment ……………………………….75,000
c.Accumulated Depreciation—Equipment ………………65,000
Loss on Disposal of Equipment………………………10,000
Equipment ……………………………….75,000
d.Depreciation Expense………………………….65,000
Loss on Disposal of Equipment ………………………10,000
Equipment ……………………………….75,000
66.Rio Grande Company purchased equipment on January 1, 2015 for $75,000. The estimated useful life of the equipment is 5 years, the salvage value is $10,000, and the company uses the double-declining balance method to depreciate fixed assets. Which of the following journal entries would Rio Grande record if the equipment is sold for $17,000 after three years?
a.Equipment ……………………………….75,000
Loss on Disposal of Equipment ………………………800
Cash ……………………………….17,000
Accumulated Depreciation—Equipment …………………58,800
b.Cash…………………………..17,000
Gain on Disposal of Equipment ………………………6,200
Equipment ……………………………….10,800
c.Cash…………………………..17,000
Depreciation Expense…………………………….10,800
Loss on Disposal of Equipment ………………………47,200
Equipment ……………………………….75,000
d.Cash ……………………………17,000
Accumulated Depreciation—Equipment …………………58,800
Equipment ……………………………….75,000
Gain on Sale of Fixed Assets ………………………..800
67.Rio Grande Company purchased equipment on January 1, 2015 for $75,000. The estimated useful life of the equipment is 5 years, the salvage value is $10,000, and the company uses the double-declining balance method to depreciate fixed assets. Which of the following would be included in the journal entry that Rio Grande would record at the end of the fifth year, if the equipment and $19,000 cash are traded for a dissimilar fixed asset with a FMV of $25,000?
a.A credit to Fixed Assets for $25,000.
b.A credit to Equipment for $10,000.
c.A credit to Gain on Disposal of Equipment for $4,000.
d.A debit to Loss on Disposal of Equipment for $4,000.
