Multiple choice

1. An asset is purchased for $50,000. It has an estimated useful life of 12 years and a salvage value of $5,000. What is the annual depreciation of the asset using the straight-line method?

A. $3,750.00 XXXXXX

B. $4,000.00 

C. $4,500.00 

D. $4,583.33 

2. An asset purchased by Able Corporation for $15,000 on 01/01/1997 also incurred freight charges of $200 and installation cost of $1,000. The asset had a life expectancy of eight years and a salvage value of $2,800. What are the accumulated straight-line depreciation and book value on 01/01/2000?

A. $1,675; $9,975 

B. $5,025; $11,175 XXXXXX

C. $1,875; 10,575 

D. $6,075; $10,125 

3. Parker Inc. purchased a $30,000 asset with a salvage value of $1,200 and an estimated useful life of three years. Â What is the book value at the end of years one and two using the 150% declining balance method?

A. $30,000 and $15,000 

B. $25,000 and $15,000 

C. $30,000 and $7,500 

D. $15,000 and $7,500 

4. An asset is purchased for $50,000. It has an estimated useful life of eight years and salvage value of $6,000. If the asset is depreciated using the double-declining balance method, what are the depreciation expense and book value at the end of year two?

A. $5,468.75; $38,281.25

B. $8,250; $30,750 

C. $9,375; $28,125 XXXXXX

D. $11,000; $28,000