Question 1 Caterpillars Inc. a manufacturing company acquired equipment on January 1 2014 for $530 000. Estimated useful life of the equipment was seven years and the estimated residual value was $13 000. On January 1 2017 after using the equipment for three years the total estimated useful life has been revised to nine total years. Residual value remains unchanged. The company uses the straight-line method of depreciation. Calculate depreciation expense for 2017. (Round any intermediate calculations to two decimal places and your final answer to the nearest dollar.)$50 476$49 238$58 889$57 4445 pointsQuestion 2 On June 30 2016 Colora Printers purchased a printer for $59 000. It expects the printer to last for four years and have a residual value of $8 000. Compute the depreciation expense on the printer for the year ended December 31 2016 using the straight-line method. (Round any intermediate calculations to two decimal places and your final answer to the nearest dollar.)$12 750$6 375$14 750$7 4385 pointsQuestion 3 The cost of an asset is $1 160 000 and its residual value is $160 000. Estimated useful life of the asset is four years. Calculate depreciation for the first year using the double-declining-balance method of depreciation. (Do not round any intermediate calculations and round your final answer to the nearest dollar.)$500 000$580 000$290 000$250 0005 pointsQuestion 4 Hastings Corporation has purchased a group of assets for $21 900. The assets and their relative market values are listed below.Land $6 800Equipment 2 500Building3 100Which of the following amounts would be debited to the Land account? (Round any intermediate calculations to two decimal places and your final answer to the nearest dollar.)$4 133$12 045$4 380$5 4755 pointsQuestion 5 On January 1 2017 Zade Manufacturing Corporation purchased a machine for $40 900 000. Zade’s management expects to use the machine for 27 000 hours over the next six years. The estimated residual value of the machine at the end of the sixth year is $47 000. The machine was used for 3 900 hours in 2017 and 5 400 hours in 2018. What is the depreciation expense for 2017 if the corporation uses the units-of-production method of depreciation? (Round any intermediate calculations to two decimal places and your final answer to the nearest dollar.)$5 900 973$13 633 333$8 170 578$5 907 7595 pointsQuestion 6 Acer Inc. plans to develop a shopping center. In the first quarter the following amounts were spent:Acquisition of land $16 000Surveys and legal fees1 200Land clearing1 100Fencing7 000Install lighting and signage 1 760What amount should be recorded as the cost of the land in the corporation’s books?$25 300$18 300$20 060$24 1005 pointsQuestion 7 A photocopier cost $95 000 when new and has accumulated depreciation of $90 000. If the business discards this plant asset the result is __________.a loss of $5 000a loss of $11 250a gain of $5 000a gain of $11 2505 pointsQuestion 8 Danube Corp. purchased a used machine for $21 000. The machine required installation costs of $6 000 and insurance while in transit of $700. At which of the following amounts would the machine be recorded?$21 000$27 000$21 700$27 7005 pointsQuestion 9 On January 1 2016 Martini Inc. acquired a machine for $1 030 000. The estimated useful life of the asset is five years. Residual value at the end of five years is estimated to be $87 000. What is the book value of the machine at the end of 2017 if the company uses the straight-line method of depreciation?$618 000$652 800$565 800$617 9965 pointsQuestion 10 Which of the following depreciation methods allocates a varying amount of depreciation each year based on an asset’s usage?The straight-line methodThe annuity methodThe units-of-production methodThe double-declining-balance method5 pointsQuestion 11 Which of the following depreciation methods allocates a higher amount of depreciation in earlier years than in later years?The units-of-production methodThe straight-line methodThe double-declining-balance methodThe first-in first-out method5 pointsQuestion 12 Westland Inc. owns a delivery truck. Which of the following costs associated with the truck will be treated as a revenue expenditure?Oil change and lubricationMajor engine overhaulModification for new useAddition to storage capacity5 pointsQuestion 13 Which of the following requires businesses to record depreciation?Revenue recognition principleMatching principleCost principleGoing concern principle5 pointsQuestion 14 Which of the following is included in the cost of land?Cost of fencingCost of pavingBrokerage commissionCost of outdoor lighting5 pointsQuestion 15 Which of the following is included in the cost of a plant asset?Amounts paid to make the asset ready for its intended useRegular repair and maintenance costsReplacement of damaged parts of the assetWages of workers who work use the asset in normal operations5 pointsQuestion 16 IFRS permits the presentation of plant assets at their fair market value because __________.U. S. GAAP requires this presentationfair market value may be more relevantfair market value is easier to compute than book valuefinancial statements users are indifferent to how plant assets are presented5 pointsQuestion 17 The expected cash value of an asset at the end of its useful life is known as __________.book valueresidual valuecarrying valuemarket value5 pointsQuestion 18 Roberts Construction Group paid $11 000 for a plant asset that had a market value of $20 500. At which of the following amounts should the plant asset be recorded?$20 500$5 500$11 000$22 0005 pointsQuestion 19 A company purchased a computer on July 1 2017 for $50 000. Estimated useful life of the computer was five years and it has no residual value. Which of the following methods should be used to best match its expense against the revenue it produces?The units-of-production methodThe straight-line methodThe double-declining-balance methodThe first-in first-out method5 pointsQuestion 20 Fred Inc. owns a delivery truck. Which of the following costs associated with the truck will be capitalized and depreciated?Modification for new useChange of oil filtersReplacement of tiresNormal engine repair
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