Question : 84. The adjusting entries to record depreciation or amortization expense or : 1229811

84. The adjusting entries to record depreciation or amortization expense or to write down assets that have become impaired: 
A. Reduce both net income and cash balances.
B. Reduce net income, but have no direct effect on cash balances.
C. Decrease cash balances, but have no direct effect upon net income.
D. Affect neither net income nor cash balances.

85. Harvard Company purchased equipment having an invoice price of $11,500. The terms of sale were 2/10, n/30, and Harvard paid within the discount period. In addition, Harvard paid a $160 delivery charge, $185 installation charge, and $931 sales tax. The amount recorded as the cost of this equipment is: 
A. $11,845.
B. $12,776.
C. $11,615.
D. $12,546.

86. Land and a warehouse were acquired for $890,000. What amounts should be recorded in the accounting records for land and for the warehouse if an appraisal showed the estimated values to be $400,000 for the land and $700,000 for the warehouse? 
A. $400,000 for land; $490,000 for warehouse.
B. $323,960 for land; $566,040 for warehouse.
C. $400,000 for land; $700,000 for warehouse.
D. $190,000 for land; $700,000 for warehouse.

87. On March 2, 2009, Glen Industries purchased a fleet of automobiles at a cost of $550,000. The cars are to be depreciated by the straight-line method over five years with no salvage value. Glen uses the half-year convention to compute depreciation for fractional periods. The book value of the fleet of automobiles at December 31, 2010, will be: 
A. $165,000.
B. $400,000.
C. $495,000.
D. $385,000.

88. On April 8, 2009, Jupitor Corp. acquired equipment at a cost of $480,000. The equipment is to be depreciated by the straight-line method over six years with no provision for salvage value. Depreciation for fractional years is computed by rounding the ownership period to the nearest month. Depreciation expense recognized in 2009 will be: 
A. $53,333.
B. $66,667.
C. $60,000.
D. $80,000.

On April 30, 2009, Tilton Products purchased machinery for $88,000. The useful life of this machinery is estimated at 8 years, with an $8,000 residual value.

89. Refer to the information above. Assume that in its financial statements, Tilton Products uses straight-line depreciation and the half-year convention. Depreciation expense recognized on this machinery in 2009 and 2010 will be: 
A. $7,500 in 2009 and $11,000 in 2010.
B. $6,000 in 2009 and $12,000 in 2010.
C. $5,000 in 2009 and $10,000 in 2010.
D. $5,500 in 2009 and $11,000 in 2010.

90. Refer to the information above. Assume that in its financial statements, Tilton Products uses straight-line depreciation and rounds depreciation for fractional years to the nearest month. Depreciation expense recognized on this machinery in 2009 and 2010 will be: 
A. $2,333 in 2009 and $7,000 in 2010.
B. $5,833 in 2009 and $10,000 in 2010.
C. $6,667 in 2009 and $10,000 in 2010.
D. $10,000 in 2009 and $10,000 in 2010.

91. Refer to the information above. Assume that in its financial statements, Tilton Products uses the 200%-declining-balance method and the half-year convention. Depreciation expense in 2009 and 2010 will be: 
A. $11,000 in 2009 and $19,250 in 2010.
B. $22,000 in 2009 and $12,571 in 2010.
C. $22,000 in 2009 and $7,857 in 2010.
D. $11,000 in 2009 and $22,000 in 2010.

92. Refer to the information above. Assume that in its financial statements, Tilton Products uses the 150%-declining-balance method and the half-year convention. Depreciation expense in 2009 and 2010 will be: 
A. $8,250 in 2009 and $14,953 in 2010.
B. $16,500 in 2009 and $12,964 in 2010.
C. $16,500 in 2009 and $16,500 in 2010.
D. $15,000 in 2009 and $11,786 in 2010.

93. Refer to the information above. In the year 2015, Tilton Products sells this machinery for $4,500. At the date of sale, the machinery had been depreciated by Tilton Products to its estimated residual value of $8,000. This sale results in: 
A. A $3,500 loss in both the company’s financial statements and income tax return.
B. No gain or loss in either the financial statements or income tax return.
C. A $3,500 loss in the financial statements, a $3,500 gain in the income tax return.
D. A $3,500 loss in the financial statements, but no gain or loss in the income tax return.