87.Refer to the information above. Assume that in its financial statements, Tilton Products uses the 150%-declining-balance method and the half-year convention. Depreciation expense in 2014 and 2015 will be:
A. $8,250 in 2014 and $14,953 in 2015.
B. $16,500 in 2014 and $12,964 in 2015.
C. $16,500 in 2014 and $16,500 in 2015.
D. $15,000 in 2014 and $11,786 in 2015.
88.Refer to the information above. In the year 2020, Tilton Products sells this machinery for $4,500. At the date of sale, the machinery had been depreciated by Tilton Products to its estimated residual value of $8,000. This sale results in:
A. A $3,500 loss in both the company's financial statements and income tax return.
B. No gain or loss in either the financial statements or income tax return.
C. A $3,500 loss in the financial statements; a $3,500 gain in the income tax return.
D. A $3,500 loss in the financial statements, but no gain or loss in the income tax return.
89.An accelerated depreciation method:
A. Results in reporting higher earnings every year.
B. Depreciates an asset over a shorter life than does the straight-line method.
C. Recognizes more depreciation expense in the early years of an asset's useful life and less in the later years.
D. Is required for assets that become technologically obsolete before they physically wear out.
90.Accelerated depreciation methods are used primarily in:
A. Income tax returns.
B. The financial statements of small businesses.
C. The financial statements of publicly owned corporations.
D. Companies with computer-based accounting systems.
91.For depreciable property other than real estate, MACRS is based upon:
A. The declining-balance method.
B. The straight-line method.
C. A 10-year recovery period.
D. The depreciation method and recovery period used by the company in its financial statements.
92.Which of the following statements about MACRS is
not
correct?
A. MACRS is the only accelerated depreciation method that may be used on newly acquired assets for federal income tax purposes.
B. The method permits "depreciating" the asset to a tax basis of $0 over a specified recovery period.
C. If a company uses MACRS in its income tax returns, it also must use MACRS in its financial statements.
D. Most businesses would benefit from using MACRS rather than straight-line depreciation in their income tax returns.
93.The gain or loss on the disposal of a depreciable asset reported in financial statements often differs from that reported for income tax purposes. The principal reason for the difference is:
A. The cost of the asset is different for financial reporting and income tax purposes.
B. The sales price of the asset is different for financial reporting and income tax purposes.
C. Different depreciation methods have been used in financial statements and in income tax returns.
D. The company has made an error because the same amount of gain or loss should appear in the income tax return as in the financial statements.
94.For the financial statements of publicly traded companies, MACRS:
A. Is recommended.
B. Is required.
C. Is optional.
D. Is not considered to be in conformity with GAAP.
95.An asset which costs $97,600 and has accumulated depreciation of $82,000 is sold for $18,000. What amount of gain or loss will be recognized when the asset is sold?
A. A gain of $15,600.
B. A loss of $15,600.
C. A loss of $2,400.
D. A gain of $2,400.
96.An asset which costs $14,400 and has accumulated depreciation of $8,000 is sold for $5,600. What amount of gain or loss will be recognized when the asset is sold?
A. A gain of $800.
B. A loss of $800.
C. A loss of $2,400.
D. A gain of $2,400.