Question;1. Corrieten;Company purchased equipment and incurred these costs;Cash price $24,000;Sales taxes 1,200;Insurance during transit 200;Installation and testing 400;Total costs $25,800;What amount should be recorded as the cost of the equipment?;A. $24,000.;B. $25,200.;C. $25,400.;D. $25,800.;2. Harrington Corporation recently;leased a number of trucks from Andre Corporation. In inspecting the books of;Harrington Corporation, you notice that the trucks have not been recorded as;assets on its balance sheet. From this you can conclude that Harrington is;accounting for this transaction as a(n);A. operating lease.;B. capital lease.;C. purchase.;D. None of the above.;3. Depreciation is a process of;A. valuation.;B. cost allocation.;C. cash accumulation.;D. appraisal.;4. Cuso Company purchased equipment on;January 1, 2006, at a total invoice cost of $400,000. The equipment has an;estimated salvage value of $10,000 and an estimated useful life of 5 years.;What is the amount of accumulated depreciation at December 31, 2007, if the;straight-line method of depreciation is used?;A. $80,000.;B. $160,000.;C. $78,000.;D. $156,000.;5. A company would minimize its depreciation expense in the;first year of owning an asset if it used;A. a high estimated life, a high salvage;value, and declining-balance depreciation.;B. a low estimated life, a high salvage;value, and straight-line depreciation.;C. a high estimated life, a high salvage;value, and straight-line depreciation.;D. a low estimated life, a low salvage;value, and declining-balance depreciation.;6. When there is a change in estimated depreciation;A. previous depreciation should be;corrected.;B. current and future years' depreciation;should be revised.;C. only future years' depreciation should;be revised.;D. None of the above.;7. Additions to plant assets;A. are revenue expenditures.;B. increase a Repair Expense account.;C. increase a Purchases account.;D. are capital expenditures.;8. Which of the following measures;provides an indication of how efficient a company is in employing its assets?;A. Current ratio.;B. Profit margin ratio.;C. Debt to total assets ratio.;D. Asset turnover ratio.;9. Pierce Company incurred $150,000 of research and;development costs in its laboratory to develop a new product. It spent $20,000;in legal fees for a patent granted on January 2, 2007. On July 31, 2007, Pierce;paid $15,000 for legal fees in a successful defense of the patent. What is the;total amount that should be debited to Patents through July 31, 2007?;A. $150,000.;B. $35,000.;C. $185,000.;D. Some other amount.;10. Indicate which one of these statements;is true.;A. Since intangible assets lack physical;substance, they need to be disclosed only in the notes to the financial;statements.;B. Goodwill should be reported as a;contra account in the stockholders' equity section.;C. Totals of major classes of assets can;be shown in the balance sheet, with asset details disclosed in the notes to the;financial statements.;D. Intangible assets are typically;combined with plant assets and natural resources and then shown in the property;plant, and equipment section.;11. If a company reports goodwill as an;intangible asset on its books, what is the one thing you know with certainty?;A. The company is a valuable company;worth investing in.;B. The company has a well-established;brand name.;C. The company purchased another company.;D. The goodwill will generate a lot of;positive business for the company for many years to come.;12. Kant Enterprises purchased a truck for $11,000 on January;1, 2006. The truck will have an estimated salvage value of $1,000 at the end of;5 years. If you use the units-of-activity method, the balance in accumulated;depreciation at December 31, 2007, can be computed by the following formula;A. ($11,000/Total estimated activity) x;Units of activity for 2007.;B. ($10,000/Total estimated activity) x;Units of activity for 2007.;C. ($11,000/Total estimated activity) x;Units of activity for 2006 and 2007.;D. ($10,000/Total estimated activity) x;Units of activity for 2006 and 2007.
Paper#45465 | Written in 18-Jul-2015Price : $19