ACCT 2014 Ch. 9

All of the following are considered fixed assets EXCEPT

• building

• truck

• land

• accounts receivable

A printing company bought a new printing press. Indicate which costs should NOT be debited to the asset account.

• Freight

• Sales tax on purchase price

• Ink

• Labor for installation

After land is purchased, the cost of tree cutting and grading are debited to the asset account. What is the useful life of the land?

• Unlimited

• Less than 5 years

• 40 years

• 6-20 years

For a trucking company, which of the following will be an expense on the Income Statement?

• Installed a TV in the sleeping compartment

• Replaced fog and cab light bulbs

• Modified the engine to add 50 more horsepower

• Removed the old radio and replaced it with a new communications module.

The method of determining depreciation that yields successive reductions in
the periodic depreciation charge over the estimated life of the asset is

• Units-of-Production

• Double-Declining Balance

• Straight-Line

• Time Valuation

A machine with a cost of $120,000 has an estimated residual value of
$15,000 and an estimated life of 15,000 hours. It is to be depreciated by the
units-of-production method. What is the amount of depreciation for the
second full year during which the machine was used 5,000 hours?

• $5,000

• $35,000

• $21,000

• $45,000

On December 31, Strike Company has decided to discard one of its batting
cages. The initial cost of the equipment was $310,000 with an accumulated
depreciation of $260,000. Depreciation has been taken up to the end of the
year. The company found a company that is willing to buy equipment for
$55,000. What is the amount of the gain or loss on this transaction?

• $0

• Cannot be determined

• Gain of $5,000

• Loss of $5,000

Machinery was purchased on January 1, 2010 for $51,000. The machinery
has an estimated life of 7 years and an estimated salvage value of $9,000.
Double-declining balance depreciation for 2011 (Year 2) would be

• $10,929

• $6,000

• $10,500

• $10,408