Question : 61.Oregon Adventures purchased equipment at the beginning of 2012 for : 1236220

 

61.Oregon Adventures purchased equipment at the beginning of 2012 for $80,000. They sold the equipment at the end of 2014 for $45,000. If the expected life of the equipment was seven years with a residual value of $10,000, and they use straight-line depreciation, which of the following is true regarding the entry to record the sale of the equipment?
A.Debit Loss $5,000.
B.Credit Gain $5,000.
C.Credit Accumulated Depreciation $40,000.
D.Credit Equipment $5,000.

62.The return on assets is calculated as:
A.Net Income divided by total assets.
B.Net Income divided by average total assets.
C.Net Income divided by ending total assets.
D.Ending total assets divided by net income.

63.The return on assets is equal to the:
A.Profit margin plus asset turnover.
B.Profit margin minus asset turnover.
C.Profit margin times asset turnover.
D.Profit margin divided by asset turnover.

64.The balance sheet of Hidden Valley Farms reports total assets of $450,000 and $550,000 at the beginning and end of the year, respectively. Net income and sales for the year are $100,000 and $800,000, respectively. What is Hidden Valley’s return on assets?
A.10%.
B.20%.
C.160%.
D.18%.

65.The balance sheet of Hidden Valley Farms reports total assets of $450,000 and $550,000 at the beginning and end of the year, respectively. Net income and sales for the year are $100,000 and $800,000, respectively. What is Hidden Valley’s profit margin?
A.10%.
B.12.5%.
C.18%.
D.22%.

66.The balance sheet of Hidden Valley Farms reports total assets of $450,000 and $550,000 at the beginning and end of the year, respectively. Net income and sales for the year are $100,000 and $800,000, respectively. What is Hidden Valley’s asset turnover?
A.1.6 times.
B.1.8 times.
C.1.5 times.
D.0.2 times.

67.The balance sheet of Hidden Valley Farms reports total assets of $450,000 and $550,000 at the beginning and end of the year, respectively. The return on assets for the year is 10%. What is Hidden Valley’s net income for the year?
A.$5,000,000.
B.$55,000.
C.$5,500,000.
D.$50,000.

68.Recognition of impairment for long-term assets is required if book value exceeds:
A.Original cost.
B.Fair value.
C.Future cash flows.
D.Accumulated depreciation.

69.The amount of impairment loss is the excess of book value over:
A.Carrying value.
B.Future cash flows.
C.Fair value.
D.Future revenues.

70.Accounting for impairment losses:
A.Involves a two-step process for recoverability and measurement.
B.Applies only to depreciable, operational assets.
C.Applies only to assets with finite lives.
D.All of the other answers are correct.

71.In testing for recoverability of an operational asset, an impairment loss is required if the:
A.Asset’s book value exceeds the present value of its expected future cash flows.
B.Expected future cash flows exceeds the asset’s book value.
C.Present value of expected future cash flows exceeds its carrying value.
D.Asset’s book value exceeds the expected future cash flows.

72.Wilson Inc. owns equipment for which it paid $70 million. At the end of 2012, it had accumulated depreciation on the equipment of $12 million. Due to adverse economic conditions, Wilson’s management determined that it should assess whether an impairment should be recognized for the equipment. The estimated future cash flows to be provided by the equipment total $60 million, and its fair value at that point totals $50 million. Under these circumstances, Wilson:
A.Would record no impairment loss on the equipment.
B.Would record an $8 million impairment loss on the equipment.
C.Would record a $20 million impairment loss on the equipment.
D.Would record a $2 million impairment loss on the equipment.

73.Leonard’s Jewelry owns a patent with a carrying value of $50 million at the end of 2012. Due to adverse economic conditions, Leonard’s management determined that it should assess whether an impairment should be recognized for the patent. The estimated future cash flows to be provided by the patent total $43 million, and its fair value at that point totals $35 million. Under these circumstances, Leonard:
A.Would record no impairment loss on the patent.
B.Would record a $7 million impairment loss on the patent.
C.Would record a $15 million impairment loss on the patent.
D.Would record a $31 million impairment loss on the patent.

74.C-Stop reports the following information at year-end:

Based on the above information, what is the total amount of impairment loss that C-Stop should record at year end?
A.$141,000.
B.$126,000.
C.$123,000.
D.$122,000.

75.Maple Inc. has the following information regarding its assets:

What amount of loss should be recorded due to asset impairments?
A.$10,000
B.$9,000
C.$8,000
D.$7,000

 

 

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