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Mixed Quiz
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1
Which of the following would not be considered a capital expenditure?
A)Sales tax on the purchase of a new piece of equipment
B)Freight to get the equipment to the factory
C)Cost of installation
D)Repair of damage incurred while the equipment was installed.
2
Which of the following would be considered a capital expenditure?
A)One year insurance on equipment after installation
B)Property tax on equipment
C)Major expenditure of a machine that will extend its useful life 5 years
D)Annual maintenance of a machine.
3
Nova Corporation purchased land and a building for $600,000. The appraised values of the land and building were $100,000 and $800,000, respectively. The purchase price allocated to the land should be:
A)$100,000
B)$80,000
C)$75,000
D)$175,000
4
Nevens Corporation purchased equipment from a commercial laundry that was going out of business. They bought three different used ironing machines at a total cost for all three of $120,000. The appraised values of the machines were $10,000, $65,400 and $54,600. The purchase price allocated to the ironer valued at $54,600 should be:
A)$50,400
B)$45,000
C)$54,600
D)$50,000
5
Fulton Corporation purchased a piece of equipment for $10,500. Sales taxes were $735. Installation costs were $485. During installation, the equipment was damaged requiring $195 in repair costs. The total cost capitalized to the equipment account should be:
A)$12,765
B)$12,030
C)$11,720
D)$11,235
6
Of the following items associated with determining annual depreciation expense, which is not an estimate?
A)useful life
B)salvage value
C)acquisition cost
D)miles in the life of a truck
7
Kwami Corporation acquired a tract of land on June 30, 2010. The total cost of the land was $180,000. Carlton estimated that the land would be used for 10 years and then sold. Assuming the company uses straight-line depreciation, the total depreciation taken on the land for the year ended December 31, 2010 should be:
A)amount cannot be determined without additional information
B)$18,000
C)$9,000
D)$0
8
Spitz Corporation acquired a truck on January 1, 2010. The total cost of the truck was $70,000. Spitz estimated that the truck would be used for 10 years before being sold for an estimated $7,000. Assuming the use of straight-line depreciation, the total depreciation expense for the year ended December 31, 2010 was:
A)$6,300
B)$7,000
C)$3,500
D)$3,150
9
Montana Industries acquired a piece of equipment on January 1, 2010. The total cost of the equipment was $63,000. Montana estimated that the equipment would be used for 7 years before being sold for an estimated $7,000. Assuming the use of straight-line depreciation, the carrying value of the equipment on January 1, 2014 will be:
A)$31,000
B)$27,000
C)$24,000
D)$27,500
10
Idaho Inc. acquired a piece of machinery on January 1, 2010. The total cost of the machinery was $108,400. Idaho estimated that the machinery would be used to produce 100,000 units of product before being sold for an estimated $18,600 at the end of 10 years. Idaho uses the units-of-production method of depreciation. Assuming the machine produced 28,500 units during the year ended December 31, 2003, the 2010 depreciation expense was:
A)$30,894
B)$25,593
C)$8,980
D)$10,840
11
CS Enterprises acquired a forklift on January 1, 2010. The total cost of the truck was $47,000. CS estimated that the truck would be used for 5 years before being sold for an estimated $5,500. CS uses the double-declining balance method of depreciation. The total depreciation expense for the year ended December 31, 2011 was:
A)$11,280
B)$7,520
C)$18,800
D)$ 9,960
12
Zeandale Inc. purchased a machine 3 years ago at a price of $102,500. At that time, useful life was estimated at 10 years with a $7,500 salvage value, and straight-line depreciation was used. After recording depreciation for the 3rd year, Zeandale decided that for future years it would revise its original estimated life from 10 to 8 years and estimated salvage value from $7,500 to $5,500. The depreciation expense to be recorded in year 4 of the machine's life is:
A)$14,800
B)$13,700
C)$8,563
D)$9,250
13
Julia Enterprises owns some equipment with an original cost of $120,800 and accumulated depreciation of $50,800. If the equipment is sold for $78,500 in cash, the entry to record this event is:
A)<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078136601/794885/Chapter16_q13_opta.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (11.0K)</a>
B)<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078136601/794885/Chapter16_q13_optb.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (10.0K)</a>
C)<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078136601/794885/Chapter16_q13_optc.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (14.0K)</a>
D)<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078136601/794885/Chapter16_q13_optd.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (10.0K)</a>
14
Fasttransit Inc. owns a jet airplane with an original cost of $5,000,000 and accumulated depreciation of $3,500,000 and a salvage value of $1,000,000. The company exchanged the airplane for 100,000 shares of stock held by another company as an investment. The stock is valued at $18 per share. What is the gain or loss recognized on the exchange?
A)$800,000 gain
B)$300,000 gain
C)$1,300,000 loss
D)no gain or loss should be recognized
15
Which of the following is not amortized?
A)Patent
B)Natural resources
C)Franchise
D)Trademark





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