Multiple Questions Answers

1. A note receivable is a negotiable instrument which
can only be collected by a bank.
eliminates the need for a bad debts allowance.
takes the place of checks in a business firm.
can be transferred to another party by endorsement.

2. Depreciable cost is the
cost of an asset less its salvage value.
cost of an asset less accumulated depreciation.
book value of an asset.
book value of an asset less its salvage value.

3. Mather Company purchased equipment on January 1, 2010 at a total invoice cost of $224,000;
additional costs of $4,000 for freight and $20,000 for installation were incurred.
 The equipment has an estimated salvage value of $8,000 and an estimated useful life of five years.
The amount of accumulated depreciation at December 31, 2011 if the straight-line method of depreciation is used is:
$96,000.
$86,400.
$99,200.
$88,000.

4. Hull Company acquires land for $86,000 cash. Additional costs are as follows:
Removal of shed              $300
Filling and grading          1,500
Salvage value of lumber of shed              120
Broker commission         1,130
Paving of parking lot      10,000
Closing costs      560
Hull will record the acquisition cost of the land as
 $89,370.
$87,690.
$89,610.
$86,000.