QUIZ 8

-
•             Question 1
5 out of 5 points
               
                Duncan reported net sales of $2,523 million and average total assets of $1,476 million. Its total asset turnover equals 1.71.                                       
                Selected Answer:             True
                                               
•             Question 2
5 out of 5 points
               
                Accounting for the exchange of assets depends on whether the transaction has commercial substance; commercial substance implies that it alters the company's future cash flows.                                       
                Selected Answer:             True
                                               
•             Question 3
5 out of 5 points
               
                A company had average total assets of $887,000. Its gross sales were $1,090,000 and its net sales were $1,000,000. The company's total asset turnover equals:                                
                Selected Answer:             1.13.
                                               
•             Question 4
5 out of 5 points
               
                The term inadequacy, as it relates to the useful life of an asset, refers to:                                              
                Selected Answer:             The insufficient capacity of a company's plant assets to meet the company's growing production demands.
                                               
•             Question 5
5 out of 5 points
               
                The straight-line depreciation method and the double-declining-balance depreciation method:                                  
                Selected Answer:             Produce the same total depreciation over an asset's useful life.
                                               
•             Question 6
5 out of 5 points
               
                A total asset turnover ratio of 3.5 indicates that:                               
                Selected Answer:             For every $1 in assets, the firm produced $3.50 in net sales during the period.
                                               
•             Question 7
5 out of 5 points
               
                Riverboat Adventures pays $310,000 plus $15,000 in closing costs to buy out a competitor. The real estate consists of land appraised at $35,000, a building appraised at $105,000, and paddleboats appraised at $210,000. Compute the cost that should be allocated to the building.                                           
                Selected Answer:             $97,500.
                                               
•             Question 8
5 out of 5 points
               
                A company purchased a tract of land for its natural resources at a cost of $1,000,000. It expects to harvest 5,000,000 board feet of timber from this land. The salvage value of the land is expected to be $200,000. The depletion expense per board foot of timber is:                                       
                Selected Answer:             $0.16.
                                               
•             Question 9
5 out of 5 points
               
                Land improvements are:                                              
                Selected Answer:             Assets that increase the usefulness of land, but that have a limited useful life and are subject to depreciation.
                                               
•             Question 10
5 out of 5 points
               
                Plant assets are used in operations and have useful lives that extend over more than one accounting period.                                               
                Selected Answer:             True
                                               
•             Question 11
5 out of 5 points
               
                The first step in accounting for an asset disposal is to calculate the gain or loss on disposal.                                           
                Selected Answer:             False
                                               
•             Question 12
5 out of 5 points
               
                The modified accelerated cost recovery system (MACRS):                                            
                Selected Answer:             Is included in the U.S. federal income tax rules for depreciating assets.
                                               
•             Question 13
5 out of 5 points
               
                Intangible assets do not include:                                              
                Selected Answer:             Land held as an investment.
                                               
•             Question 14
5 out of 5 points
               
                Marks Consulting purchased equipment costing $45,000 on January 1, Year 1. The equipment is estimated to have a salvage value of $5,000 and an estimated useful life of 8 years. Straight-line depreciation is used. If the equipment is sold on July 1, Year 5 for $20,000, the journal entry to record the sale will include a:                                              
                Selected Answer:             Debit to accumulated depreciation for $22,500.
                                               
•             Question 15
5 out of 5 points
               
                Salvage value is an estimate of an asset's value at the end of its benefit period.                                  
                Selected Answer:             True
                                               
•             Question 16
0 out of 5 points
               
                A company used straight-line depreciation for an item of equipment that cost $12,000, had a salvage value of $2,000 and a five-year useful life. After depreciating the asset for three complete years, the salvage value was reduced to $1,200 but its total useful life remained the same. Determine the amount of depreciation to be charged against the equipment during each of the remaining years of its useful life:                                  
                Selected Answer:             $1,800
                                               
•             Question 17
0 out of 5 points
               
                Martin Company purchases a machine at the beginning of the year at a cost of $60,000. The machine is depreciated using the double-declining-balance method. The machine’s useful life is estimated to be 4 years with a $5,000 salvage value. Depreciation expense in year 4 is:                                
                Selected Answer:             $13,750.
                                               
•             Question 18
5 out of 5 points
               
                An asset's book value is $36,000 on January 1, Year 6. The asset is being depreciated $500 per month using the straight-line method. Assuming the asset is sold on July 1, Year 7 for $25,000, the company should record:                                    
                Selected Answer:             A loss on sale of $2,000.
                                               
•             Question 19
5 out of 5 points
               
                Financial accounting and tax accounting require the same recordkeeping and there should be no difference in results between the two accounting systems.                                    
                Selected Answer:             False
                                               
•             Question 20
5 out of 5 points
               
                Wickland Company installs a manufacturing machine in its production facility at the beginning of the year at a cost of $87,000. The machine's useful life is estimated to be 5 years, or 400,000 units of product, with a $7,000 salvage value. During its second year, the machine produces 84,500 units of product. Determine the machines' second year depreciation under the straight-line method.                                           

                Selected Answer:             $16,000.

Comments

Post a Comment

Popular posts from this blog

ACG2021-Connect Ch.4

-
Image
Required information Allied Merchandisers was organized on May 1. Macy Co. is a major customer (buyer) of Allied (seller) products.   May 3 Allied made its first and only purchase of inventory for the period on May 3 for 1,000 units at a price of $10 cash per unit (for a total cost of $10,000). 5 Allied sold 500 of the units in inventory for $14 per unit (invoice total: $7,000) to Macy Co. under credit terms 2/10, n/60. The goods cost Allied $5,000. 7 Macy returns 50 units because they did not fit the customer’s needs (invoice amount: $700). Allied restores the units, which cost $500, to its inventory. 8 Macy discovers that 50 units are scuffed but are still of use and, therefore, keeps the units. Allied sends Macy a credit memorandum for $300 toward the original invoice amount to compensate for the damage. 15 Allied recei
Read more

ACG- Connect Ch.9

-
Image
Sylvestor Systems borrows $195,000 cash on May 15, 2017, by signing a 120-day, 6% note. 1.  On what date does this note mature? September 11, 2017 September 12, 2017 Correct September 13, 2017 September 14, 2017 September 15, 2017 2.  Assume the face value of the note equals $195,000, the principal of the loan.   Explanation Maturity date = May 15 + 120 days = September 12, 2017. Required information [The following information applies to the questions displayed below.] BMX Company has one employee. FICA Social Security taxes are 6.2% of the first $118,500 paid to its employee, and FICA Medicare taxes are 1.45% of gross pay. For BMX, its FUTA taxes are 0.6% and SUTA taxes are 2.9% of the first $7,000 paid to its employee. Gross Pay through August Gross Pay for September a. $ 6,400 $ 1,700 b.
Read more

ACG- Connect Ch. 5

-
Image
6 . In 2017, Dakota Company had net sales (at retail) of $141,000.   At Cost At Retail Beginning inventory $ 33,000 $ 65,300 Cost of goods purchased 55,992 99,500 The above additional information is available from its records at the end of 2017. Use the retail inventory method to estimate Dakota's 2017 ending inventory at cost.  (Round cost ratio to the nearest whole percentage.)   Explanation At Cost At Retail Goods available for sale Beginning inventory $ 33,000 $ 65,300 Cost of goods purchased 55,992 99,500 Goods available for sale $ 88,992
Read more