101. Computer equipment was acquired at the beginning of the year at a cost of $65,000 that has an estimated residual value of $3,000 and an estimated useful life of 5 years. Determine the 2nd year’s depreciation using straight-line depreciation.
A. $26,000
B. $24,800
C. $12,400
D. $13,000
102. Which of the following is true?
A. If using the double-declining-balance the total amount of depreciation expense during the life of the asset will be the highest.
B. If using the units-of-production method, it is possible to depreciate more than the depreciable cost.
C. If using the straight line method, the amount of depreciation expense during the first year is higher than that of the double-declining-balance.
D. Regardless of the depreciation method, the amount of total depreciation expense during the life of the asset will be the same.
103. An asset was purchased for $120,000 on January 1, 2010 and originally estimated to have a useful life of 10 years with a residual value of $10,000. At the beginning of 2012, it was determined that the remaining useful life of the asset was only 4 years with a residual value of $2,000. Calculate the 2012 depreciation expense using the revised amounts and straight line method.
A. $25,000
B. $11,000
C. $24,000
D. $24,500
104. A fixed asset with a cost of $52,000 and accumulated depreciation of $47,500 is traded for a similar asset priced at $60,000 in a transaction with commercial substance. Assuming a trade-in allowance of $5,000, the cost basis of the new asset is
A. $54,000
B. $59,500
C. $60,000
D. $60,500
105. A fixed asset with a cost of $41,000 and accumulated depreciation of $36,000 is traded for a similar asset priced at $50,000. Assuming a trade-in allowance of $4,000, the cost basis of the new asset is
A. $54,000
B. $45,000
C. $51,000
D. $50,000
106. A fixed asset with a cost of $41,000 and accumulated depreciation of $36,500 is traded for a similar asset priced at $60,000. Assuming a trade-in allowance of $3,000, the recognized loss on the trade is
A. $3,000
B. $4,500
C. $ 500
D. $1,500
107. A fixed asset with a cost of $30,000 and accumulated depreciation of $28,500 is sold for $3,500. What is the amount of the gain or loss on disposal of the fixed asset?
A. $2,000 loss
B. $1,500 loss
C. $3,500 gain
D. $2,000 gain
108. The Bacon Company acquired new machinery with a price of $15,200 by trading in similar old machinery and paying $12,700. The old machinery originally cost $9,000 and had accumulated depreciation of $5,000. In recording this transaction, Bacon Company should record
A. the new machinery at $16,700
B. the new machinery at $12,700
C. a gain of $1,500
D. a loss of $1,500
109. When a company discards machinery that is fully depreciated, this transaction would be recorded with the following entry
A. debit Accumulated Depreciation; credit Machinery
B. debit Machinery; credit Accumulated Depreciation
C. debit Cash; credit Accumulated Depreciation
D. debit Depreciation Expense; credit Accumulated Depreciation
110. When a company sells machinery at a price equal to its book value, this transaction would be recorded with an entry that would include the following:
A. debit Cash and Accumulated Depreciation; credit Machinery
B. debit Machinery; credit Cash and Accumulated Depreciation
C. debit Cash and Machinery; credit Accumulated Depreciation
D. debit Cash and Depreciation Expense; credit Accumulated Depreciation