Question :
101. Estimating _____ presents the most difficult task in the depreciation : 1245648
101. Estimating _____ presents the most difficult task in the depreciation and amortization calculation. A change in this estimate will change the depreciation and amortization amounts going forward.
A. disposal costs
B. salvage value
C. acquisition costs
D. service lives
E. ordinary wear and tear from use
102. The _____ method divides the acquisition cost of an asset (including the cost to dismantle and retire) less its estimated salvage value by the estimated service life to calculate depreciation or amortization.
A. straight-line
B. sum-of-the-years’-digits
C. double declining balance method
D. accelerated depreciation
E. decelerated depreciation
103. Marley Corporation has a machine which costs $10,000, has an estimated salvage value of $400, and has an expected service life of five years. The straight-line (time) method annual depreciation is
A. $960.
B. $1,400.
C. $1,500.
D. $1,920.
E. $2,000.
104. Alpha Corporation acquired a patent for $60,000 which has an expected service life of five years and zero salvage value. The annual amortization is
A. $5,000.
B. $6,000.
C. $12,000.
D. $24,000.
E. $30,000.
105. The method of depreciation for assets whose utilization is not uniform over time is the _____ method.
A. Accelerated
B. Decelerated
C. Straight-Line (Time)
D. Straight-Line (Use)
E. Sum-of-the-years’-digits
106. Dickinson Company owns a delivery truck that costs $108,000, has an estimated salvage value of $8,000, and will provide 200,000 miles of use before retirement. If the truck operates 24,000 miles in a given year, the straight-line (use) depreciation charge is
A. $6,000
B. $12,000
C. $12,960
D. $24,000
E. $0
107. Eaton Company has some assets that provide more and better services in the early years of their lives and require increasing amounts of maintenance as they grow older. The _____ method(s), which recognize larger depreciation charges in early years and smaller depreciation charges in later years, can be justified.
A. declining-balance
B. accelerated depreciation
C. sum-of-the-years’-digits
D. all of the above
E. none of the above
108. If permitted a choice of depreciation methods for tax reporting, a firm should try to maximize the amount of the
A. reductions in tax payments from claiming depreciation.
B. present value of the reductions in tax payments from claiming depreciation.
C. future value of the reductions in tax payments from claiming depreciation.
D. present value of the increase in tax payments from claiming depreciation.
E. amount of the increase in tax payments from claiming depreciation.
109. Depreciation and amortization affect both net income reported in the financial statements and taxable income on tax returns. Which of the following is /are true?
A. Taxing authorities in most jurisdictions specify allowable depreciation methods for tax reporting.
B. When permitted to do so by the taxing authority, firms often use different depreciation methods for financial and tax reporting.
C. The difference between depreciation expense in the financial statements and the depreciation deduction on the tax return leads to an issue in accounting for income taxes.
D. all of the above
E. none of the above
110. When taxing authorities permit a choice among alternative depreciation methods, a firm should choose the alternative that allows it to pay the _____ amount of tax, as _____ as possible, within the law.
A. most; early
B. most; late
C. least; early
D. least; late
E. same; often
