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ACC201 module 8 quiz




Question;1.;value:2.00 points;The;useful life of a plant asset is;The length of time it is;used productively in a company's operations.;Never related to its physical life.;Its productive life, but not to exceed one year.;Determined by the FASB.;Determined by law.;2.;value:2.00 points;A company;used straight-line depreciation for an item of equipment that cost $12,000, had;a salvage value of $2,000, and had a five-year useful life. After depreciating;the asset for three complete years, the salvage value was reduced to $1,200 and;its total useful life was increased from five years to six years. Determine the;amount of depreciation to be charged against the machine during each of the;remaining years of its useful life;$1,000;$1,800;$1,467;$1,600;$2,160;3.;value:2.00 points;Total asset turnover is used to evaluate;The efficiency of management's;use of assets to generate sales.;The need for asset replacement.;The number of times operating assets were sold during the year.;The cash flows used to acquire assets.;The relation between asset cost and book value.;4.;value:2.00 points;Land improvements are;Assets that increase the usefulness of land and, like land, are not;depreciated.;Assets that increase the;usefulness of land but that have a limited useful life and are subject to;depreciation.;Included in the cost of the land account.;Expensed in the period incurred.;Also called basket purchases.;5.;value:2.00 points;A;depreciation method in which a plant asset's depreciation expense for a period;is determined by applying a constant depreciation rate each period to the;asset's beginning book value is called;Book value depreciation.;Declining-balance;depreciation.;Straight-line depreciation.;Units-of-production depreciation.;Modified accelerated cost recovery system (MACRS) depreciation.;6.;value:2.00 points;A company;borrowed $300,000 cash from the bank by signing a five-year, 8% installment;note. The present value factor for an annuity at 8% for five years is 3.9927.;Each annuity payment equals $75,137. How much cash did the company receive from;the bank on the day they borrowed this money?;$75,137;$94,013;$300,000;$375,685;$1,197,810;Top of Form;7.;value:2.00 points;A company issues bonds at par on April 1. These;9% bonds have a par value of $100,000 and pay interest annually. April 1, is;four months after the most recent interest payment date. How much total cash;interest is received on April 1 by the bond issuer?;$750;$5,250;$1,500;$3,000;$6,000;8.;value:2.00 points;Secured;bonds;Are also referred to as debentures.;Have specific assets of;the issuing company pledged as collateral.;Are backed by the issuer's bank.;Are subordinated to those of other unsecured liabilities.;Are the same as sinking fund bonds.;Top of Form;9.;value:2.00 points;Bonds that mature at different dates;and end up with the total principal repaid gradually over a number of periods;are referred to as;Registered bonds;Bearer bonds;Callable bonds;Sinking fund bonds;Serial bonds;10.;value:2.00 points;A bond sells at a discount when the;Contract rate is above the market rate.;Contract rate is equal to the market rate.;Contract rate is below the;market rate.;Bond has a short-term life.;Bond pays interest only once a year.;11.;value:20.00 points;Dobbs Company issues 5%, two-year bonds, on;December 31, 2013, with a par value of $90,000 and semiannual interest payments.;Semiannual Period-End;Unamortized Discount;Carrying Value;(0);12/31/2013;$;5,800;$;84,200;(1);6/30/2014;4,350;85,650;(2);12/31/2014;2,900;87,100;(3);6/30/2015;1,450;88,550;(4);12/31/2015;0;90,000;Use;the above straight-line bond amortization table and prepare journal entries;for the following.;Required;(a);The issuance of bonds on December 31, 2013.;(b);The first through fourth interest payments on;each June 30 and December 31.;(c);The maturity of the bond on December 31, 2015.;12.;value:20.00 points;Woodwick Company issues 10%, five-year bonds;on December 31, 2012, with a par value of $110,000 and semiannual interest;payments.;Semiannual Period-End;Unamortized Premium;Carrying Value;(0);12/31/2012;$;8,311;$;118,311;(1);6/30/2013;7,480;117,480;(2);12/31/2013;6,649;116,649;Use;the above straight-line bond amortization table and prepare journal entries;for the following.;(a);The;issuance of bonds on December 31, 2012.;(b);The;first interest payment on June 30, 2013.;(c);The;second interest payment on December 31, 2013.;13.;value:20.00 points;In early January 2013, NewTech purchases;computer equipment for $162,000 to use in operating activities for the next;four years. It estimates the equipment?s salvage value at $29,000.;Prepare a table showing depreciation and book;value for each of the four years assuming double-declining-balance;depreciation.;14.;value:20.00 points;On April 1, 2012, Cyclone?s Backhoe Co.;purchases a trencher for $320,000. The machine is expected to last four;years and have a salvage value of $32,000.;Compute depreciation expense for both 2012;and 2013 assuming the company uses the straight-line method.;Bottom of Form;Bottom of Form


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