31) Amortizable cost is defined as:
A) book value
B) salvage value
C) cost minus accumulated depreciation
D) cost minus salvage value
32) In which of the following depreciation methods is annual depreciation calculated as the difference between the asset's historical cost and its residual value, divided by the asset's useful life in years?
A) double-declining-balance
B) straight-line
C) units-of-production
D) depletion
33) Carrying amount is defined as:
A) cost less salvage value
B) cost less accumulated depreciation
C) current market value less salvage value
D) current market value less accumulated depreciation
34) On January 2, 2009 McNally's Extra Corporation acquired equipment for $120,000. The estimated life of the equipment is 5 years or 20,000 hours. The estimated residual value is $20,000. If McNally's Extra Corporation uses the straight-line method of depreciation, what will be the debit to Depreciation Expense for the year ended December 31, 2010, during which period the asset was used 4,500 hours?
A) $20,000
B) $22,500
C) $24,000
D) $27,000
35) On January 2, 2009, McNally's Extra Corporation acquired equipment for $120,000. The estimated life of the equipment is 5 years or 20,000 hours. The estimated residual value is $20,000. What is the balance in Accumulated Depreciation on December 31, 2010, if McNally's Extra Corporation uses the double-declining-balance method of depreciation?
A) $23,200
B) $36,000
C) $43,200
D) $76,800
36) On January 2, 2009 McNally's Extra Corporation acquired equipment for $120,000. The estimated life of the equipment is 5 years or 20,000 hours. The estimated residual value is $20,000. What is the amount of depreciation expense for 2011, if McNally's Extra Corporation uses the asset 4,000 hours and uses the units-of-production method of depreciation?
A) $20,000
B) $24,000
C) $25,000
D) $30,000
37) The double-declining-balance method of depreciation causes:
A) less depreciation in early years of an asset's use as compared to other depreciation methods
B) more depreciation in early years of an asset's use as compared to other depreciation methods
C) the same amount of depreciation in early years of an asset's use as compared to other depreciation methods
D) is not an acceptable depreciation method according to GAAP
38) At the end of an asset's useful life, the balance in Accumulated Depreciation will:
A) be greater under units-of-production depreciation than under straight-line depreciation
B) be the same amount under all the depreciation methods
C) be a greater amount under straight-line depreciation than under double-declining-balance depreciation
D) be a lesser amount under double-declining-balance depreciation than under units-of-production depreciation
39) To measure depreciation, all of the following must be known
except:
A) the asset's useful life in terms of years, hours, or units
B) the estimated residual value of the asset
C) the cost of the asset
D) the current market value of the asset
40) Depreciation computed under double-declining-balance will decrease each year because:
A) the book value used in the computation each year increases
B) the rate used in the computation each year increases
C) the rate used in the computation each year decreases
D) the book value used in the computation each year decreases