Question : 101. A company purchased equipment valued at $200,000 January 1. The : 1256943

 

 

101. A company purchased equipment valued at $200,000 on January 1. The equipment has an estimated useful life of six years or 5million units. The equipment is estimated to have a salvage value of $13,400. Assuming the double declining balance method of depreciation, what is the book value at the end of the second year?

A $166,667.00

B. $88,897.78

C. $96,416.25

D. $168,900.00

E. $137,800.00

 

 

102. Cobb Corn Company purchases a large lot on which a building is located. The negotiated purchase price is $2,500,000 for the lot and the building. The company pays $71,500 in commissions and taxes. The appraisal values of each item is as follows:  land $650,000, building $1,750,000, land improvements $120,000. What is the appropriate amount to be recordedin the general journal for the building?

A $1,750,000

B. $1,785,650

C. $1,735,000

D. $1,685,379

E. $1,730,000

 

 

 

 

103.January 2010, Giant Green Company pays $3,000,000 for a tract of land with two buildings on it. It plans to demolish Building 1 and build a new store in its place. Building 2 will be a company office; it is appraised at $742,000, with a useful life of 25 years and a $75,000 salvage value. A lighted parking lot near Building 1 has improvements (Land Improvements 1) valued at $400,500 that are expected to last another 18 years with no salvage value. Without the buildings and improvements, the tract of land is valued at $2,020,600. Giant Green also incurs the following additional costs:

 

Cost to demolish Building 1

$

400,200

Cost of additional land grading

 

200,000

Cost to construct new building (Building 3), having a useful life of 25 years and a $322,000 salvage value

 

3,851,000

Cost of new land improvements (Land Improvements 2) near Building 2 having a 20-year useful life and no salvage value

 

122,000

What is the amount that should be recorded for land?

A $2,516,600

B. $2,020,600

C. $3,851,000

D. $1,916,400

E. $3,000,000

 

 

104. January 2010, Giant Green Company pays $3,000,000 for a tract of land with two buildings on it. It plans to demolish Building 1 and build a new store in its place. Building 2 will be a company office; it is appraised at $742,000, with a useful life of 25 years and a $75,000 salvage value. A lighted parking lot near Building 1 has improvements (Land Improvements 1) valued at $400,500 that are expected to last another 18 years with no salvage value. Without the buildings and improvements, the tract of land is valued at $2,020,600. Giant Green also incurs the following additional costs:

Cost to demolish Building 1

$

400,200

Cost of additional land grading

 

200,000

Cost to construct new building (Building 3), having a useful life of 25 years and a $322,000 salvage value

 

3,851,000

Cost of new land improvements (Land Improvements 2) near Building 2 having a 20-year useful life and no salvage value

 

122,000

What is the amount that should be recorded for Building #1?

A $600,200

B. $742,000

C. $667,000

D. $703,800

E. $487,921

 

 

105.On September 1, 2010, Drill Far Company purchased a tract of land for $2,300,000. The land is estimated to have a salvage value or $50,000, a useful life of four years, and contain an estimated 4,234,000 tons of iron ore. The company also purchased equipment to use in the extraction process that cost $220,450. The company plans to abandon the equipment when the ore is completely mined. During 2010, the company extracted and sold 1.25 million tons of ore. What is the depletion expense recorded for 2010?

A. $575,000

B. $679,027

C. $664,265

D. $562,500

E. $600,000

 

 

106. Ace Company purchased a machine valued at $320,000 on August 1. The equipment has an estimated useful life of five years or 2.5 million units. The equipment is estimated to have a salvage value of $8,200. Assuming the double-declining-balance method of depreciation, what is the amount of depreciation expense that needs to be recorded at the end of the second year?

A $128,000

B. $62,360

C. $90,880

D. $88,750

E. $106,667

 

 

107. Ace Company purchased a machine valued at $320,000 on August 1. The equipment has an estimated useful life of five years or 2.5 million units. The equipment is estimated to have a salvage value of $8,200. Assuming the straight-line method of depreciation, what is the amount of depreciation expense that needs to be recorded at the end of the first year?

A $64,000

B. $76,800

C. $62,360

D. $25,983

E. $106,667

 

 

108. On December 31, 2013, Stable Company sold a piece of equipment that was purchased on January 1, 2008. The equipment originally cost $820,000 and has an estimated useful life of eight years. Stable uses the straight-line method of depreciation. What is the gain/loss on the sale of equipment that Stable will recognize if the equipment was sold for $230,000?

A $230,000 gain

B. $25,000 loss

C. $25,000 gain

D. $73,750 gain

E. $0; no gain or loss

 

 

 

 

 

 

109. On December 31, 2013, Stable Company sold a piece of equipment that was purchased on January 1, 2009. The equipment originally cost $820,000 and has an estimated useful life of eight years. Stable uses the double–declining-balance method of depreciation. What is the gain/loss on the sale of equipment that Stable will recognize if the equipment was sold for $230,000?

A $35,409.50gain

B. $25,000.00loss

C. $25,000.00gain

D. $35,408.00loss

E. $0; no gain or loss

 

 

110. Smitty Museum purchased the copyright to a piece of artwork for $922,000. Smitty plans to reproduce 1.8 million posters of the artwork over a period of 12 years. Calculate the amortization for the year assuming the Museum plans to reproduce and sell 130,000 posters the first year.

A $78,633

B. $76,833

C. $66,589

D. $74,125

E.$ 0, copyrights are not amortized.