Exam Review Quiz

All but which of the following are acceptable depreciation methods under GAAP?

• Straight-line

• Units of Production

• Amortization

• Double declining balance

All but which of the following are amortized under GAAP?

• Patents

• Trademarks

• Copyrights

• Goodwill

Which of the following would be considered a capital expenditure?

• Repairing a leaky roof

• Replacing the brakes on a delivery van

• Replacing the air conditioning system at the company headquarters

• Weekly cleaning charges for the executive offices

A company purchased equipment on 1/1/15 for $40,000, with an estimated 4 year life, to be used for a total of 24,000 baking hours, with a $4,000 residual value. She bakes for 4,000 hours in 2015 and 7,000 hours in 2016. What is her depreciation expense for 2016 if she uses units of production depreciation method?

• $10,000

• $10,500

• $9,000

• $11,667

A company purchases equipment on 1/1/15 for $40,000, with an estimated 4 year life, to be used for a total of 24,000 baking hours, with a $4,000 residual value. She bakes for 4,000 hours in 2015 and 7,000 hours in 2016. What is her depreciation expense for 2016 if she uses Double Declining Balance method?

• $8,000

• $9,000

• $20,000

• $10,000

Cainas Cookies purchases equipment on 1/1/15 for $40,000, to be used for a total of 72,000 baking hours, with a $4,000 residual value. Cainas uses a units of production depreciation method. She bakes for 5,000 hours in 2015 and 9,000 hours in 2016. On 1/1/17 she sells the equipment for $30,000. Which of the following is true?

• To record the entry, she will need to credit the equipment account for $33,000

• To record the entry, she will need to credit accumulated depreciation for $7,000.

• She sold the equipment at a gain of $8,000

• She sold the equipment at a loss of $3,000

All but which of the following are amortized over the useful life of the asset?

• Patent

• Copyright

• Research and Development

• Franchise fees

Federal Income taxes payable, FUTA, and SUTA are all employer payroll tax expenses on a company’s books.

• True

• False

All of the following are considered current liabilities except
for:

• unearned revenue

• accounts payable

• accrued payables

• bonds payables

I decide I want to retire in 20 years, and plan to invest $6,000
a year. Assuming a 12% interest rate, to solve for how much I
will have in my fund to retire with, I need to solve for:
$6,000 (PV ann n = 20, I = 12%)

• true

• false