77.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.
78.On March 2, 2014, 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, 2015, will be:
A. $165,000.
B. $330,000.
C. $495,000.
D. $385,000.
79.On April 8, 2015, 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 2015 will be:
A. $53,333.
B. $66,667.
C. $60,000.
D. $80,000.
80.Machinery acquired new on January 1 at a cost of $80,000 was estimated to have a useful life of 10 years and a residual salvage value of $20,000. Straight-line depreciation was used. On January 1, following six full years of use of the machinery, management decided that the estimate of useful life had been too long and that the machinery would have to be retired after three years, that is, at the end of the ninth year of service. Under this revised estimate, the depreciation expense for the seventh year of use would be:
A. $8,000.
B. $10,000.
C. $13,000.
D. $24,000.
On April 2, 2014, Victor, Inc. acquired a new piece of filtering equipment. The cost of the equipment was $160,000 with a residual value of $20,000 at the end of its estimated useful lifetime of 4 years.
81.Refer to the information above. Assume that in its financial statements, Victor uses straight-line depreciation and rounds depreciation for fractional years to the nearest whole month. Depreciation recognized on this equipment in 2014 and 2015 will be:
A. $23,333 in 2014 and $35,000 in 2015.
B. $40,000 in 2014 and $30,000 in 2015.
C. $20,000 in 2014 and $35,000 in 2015.
D. $26,250 in 2014 and $35,000 in 2015.
82.Refer to the information above. Assume that in its financial statements, Victor uses straight-line depreciation and the half-year convention. Depreciation recognized on this equipment in 2014 and 2015 will be:
A. $40,000 in 2014 and $30,000 in 2015.
B. $23,333 in 2014 and $30,000 in 2015.
C. $17,500 in 2014 and $35,000 in 2015.
D. $20,000 in 2014 and $35,000 in 2015.
83.Refer to the information above. If Victor uses straight-line depreciation with the half-year convention, the book value of the equipment at December 31, 2015 will be:
A. $90,000.
B. $107,500.
C. $106,667.
D. $105,000.
On April 30, 2014, Tilton Products purchased machinery for $88,000. The useful life of this machinery is estimated at 8 years, with an $8,000 residual value.
84.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 2014 and 2015 will be:
A. $7,500 in 2014 and $11,000 in 2015.
B. $6,000 in 2014 and $12,000 in 2015.
C. $5,000 in 2014 and $10,000 in 2015.
D. $5,500 in 2014 and $11,000 in 2015.
85.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 2014 and 2015 will be:
A. $2,333 in 2014 and $7,000 in 2015.
B. $5,833 in 2014 and $10,000 in 2015.
C. $6,667 in 2014 and $10,000 in 2015.
D. $10,000 in 2014 and $10,000 in 2015.
86.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 2014 and 2015 will be:
A. $11,000 in 2014 and $19,250 in 2015.
B. $22,000 in 2014 and $12,571 in 2015.
C. $22,000 in 2014 and $7,857 in 2015.
D. $11,000 in 2014 and $22,000 in 2015.