Question 1

An asset was purchased for $120,000 on January 1, Year 1 and originally estimated to have a useful life of 10 years with a residual value of $10,000. At the beginning of the third year, it was determined that the remaining useful life of the asset was only four years with a residual value of $2,000. Calculate the third-year depreciation expense using the revised amounts and straight-line method.

Accepted Answer

A)   $25,000
B)   $11,000
C)   $24,000
D)   $24,500E) B) and C)
F) All of the above

Question 2

A building with an appraisal value of $154,000 is made available at an offer price of $172,000. The purchaser acquires the property for $40,000 in cash, a 90-day note payable for $45,000, and a mortgage amounting to $75,000. The cost basis recorded in the buyer's accounting records to recognize this purchase is

Accepted Answer

A)   $154,000
B)   $172,000
C)   $160,000
D)   $120,000E) B) and C)
F) A) and D)

Question 3

When a company exchanges machinery and receives a trade-in allowance less than the book value, this transaction would be recorded with which of the following entries?

Accepted Answer

A)   debit Machinery and Accumulated Depreciation; credit Machinery and Cash
B)   debit Cash and Machinery; credit Accumulated Depreciation
C)   debit Cash and Machinery; credit Accumulated Depreciation and Machinery
D)   debit Machinery, Accumulated Depreciation, and Loss on Exchange of Machinery; credit Machinery and CashE) None of the above
F) A) and B)

Exam 10: Long-Term Assets: Fixed and Intangible

Correct Answer
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When a company exchanges machinery and receives a trade-in allowance less than the book value, this transaction would be recorded with which of the following entries?

Correct Answer
verified

Correct Answer
verified

Exam 10: Long-Term Assets: Fixed and Intangible

Correct AnswerverifiedShow Answer

When a company exchanges machinery and receives a trade-in allowance less than the book value, this transaction would be recorded with which of the following entries?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified