DiegoVillescasACCT2301.03POST (2)

Bike World purchases equipment $2,000,000 and spend $500,000 on transportation and installation. Record the transaction

• Dr. Equipment 2,500,000

  Cr. Cash 2,500,000

• Dr. Equipment 2,000,000 and Transportation 500,000

  Cr. Cash 2,500,000

• Dr. Cash 2,500,000

  Cr. Equipment 2,500,000

Which of these is an intangible asset?

• Cash

• Land

• Patents

• Equipment

 

True or False: Land is used up (depreciated)

• True

• False

 

True or False: Capitalized cost are not recorded as an expense

• True

• False

Which of these cost are capitalized?

• Ordinary Repairs

• Recurring Small Expenses

• Extraordinary Repairs

• Routine Upkeep

1.     Barber Inc. depreciates its building on a straight-line basis. A building was purchased on January 1 that had an estimated useful life of 20 years and a residual value of $20,000. The company’s Depreciation Expense for that year was $20,000 on the building. What was the original cost of the building?

• 400,000

• 420,000

• 380,000

• 500,000

What is it called when events or circumstances interfere with a company's ability to recover the value of an asset through future operations?

• Tangible Loss

• Interference

• Depreciation

• Impairment

1.     Assume that Six Flags bought building and land for $175,000 cash. The land represents 70% of the purchase price. How much is being allocated to each Asset?

• 122500 to Land and 52500 to Buildings

• 122500 to Buildings

  and 52500 to Land

• 175000 to both

• 87500 to Land and 87500 to Buildings

1.     Thornton Inc. purchased a machine on January 1 for $45,000 and is depreciating it with the straight-line method over a life of 10 years, using a residual value of $3,000. Depreciation Expense for the machine for that year ended December 31 is

• 4800

• 4500

• 4200

• 3900

1.     The equation to find Book Value of an Asset is:

• Cost - Accumulated Depreciation

• Cost + Accumulated Depreciation

• Cost - Residual Value

• Cost + Residual Value