Question :
21) Allied Industries purchased a piece of equipment for $65,000 : 1232341
21) Allied Industries purchased a piece of equipment for $65,000 with an estimated salvage value of $15,000 on January 1. Its estimated life is 5 years. To the nearest dollar, what is the equipment’s depreciation using double-declining-balance for year 2?
A) $ 26,000
B) $ 20,000
C) $ 15,600
D) $ 12,000
22) Digital Solutions has a delivery truck that was purchased for $42,000 and has a salvage value of $5,000. It expects the truck to last 125,000 miles. During Year 1, the truck traveled 32,500 miles and during Year 2, the truck traveled 28,500 miles. What is the depreciation expense for Year 2 to the nearest dollar using the units-of-production method? (Round to three decimal places to get the unit rate.)
A) $10,920
B) $ 9,620
C) $ 9,576
D) $ 8,436
23) An asset has a cost of $50,000 with a residual value of $10,000. It has a life of 5 years and was purchased on January 1. Its fourth full year of depreciation expense under double-declining-balance will be:
A) $7,200.
B) $4,320.
C) $ 800.
D) $ 0.
24) It is determined that a computer’s depreciation expense for the year is $3,500. The journal entry to record this will be:
A) debit Depreciation Expense – computer $3,500; credit Cash $3,500.
B) debit Accumulated Depreciation – computer $3,500; credit Cash $3,500.
C) debit Depreciation Expense – computer $3,500; credit Accumulated Depreciation, $3,500.
D) debit Cash $3,500; credit Depreciation Expense – computer $3,500.
25) A building was purchased on August 1 for $450,000. It has a salvage value of $38,000 and a useful life of 35 years. To the nearest dollar, how much will the depreciation expense for the building be for the first year ended December 31, using the straight-line method?
A) $12,857
B) $ 5,357
C) $ 4,905
D) $11,771
26) After 4 years, a machine had an accumulated depreciation of $38,000. Originally, the machine had an anticipated life of 8 years and a salvage value of $5,000. If the current book value after 4 years is $43,000 and the machine has only 2 years of useable life left, how much will be depreciated in Year 5 and in Year 6 using the straight-line method of depreciation, and assuming the salvage value is still $5,000?
A) $21,500 each year
B) $ 9,500 each year
C) $19,000 each year
D) $10,125 each year
27) The depreciation method in which the depreciable cost of an asset is apportioned equally over its estimated life in terms of month or years is called the:
A) double-declining-balance method.
B) units-of-production method.
C) amortization method.
D) straight-line method.
28) A company purchased a van at a cost of $42,000 and expects its salvage value to be $6,000 after 120,000 miles of service. Using the units-of-production method, what is the first year’s depreciation if the van is driven 24,000 miles?
A) $ 1,200
B) $ 4,200
C) $ 7,200
D) $12,000
29) Acme paid $100,000 for a machine with a $5,000 salvage value and an estimated life of 190,000 hours.
Acme reports on a calendar year basis and used the machine for 1,700 hours during the first year it owned the asset. Which of the following statements accurately compare the first year depreciation expense if the asset had been purchased on January 1 of the current year versus a March 1 acquisition date.
A) Depreciation expense if acquired January 1 is $850 and if acquired March 1 is $708.
B) Depreciation expense if acquired January 1 is $850 and if acquired March 1 is $637.
C) In both cases, the depreciation expense is $850.
D) Depreciation expense if acquired January 1 is $895 and if acquired March 1 is $746.
