Week 7 question

1.On October 1, 2022, Sandhill Co. places a new asset into service. The cost of the asset is $103500 with an estimated 5-year life and $22500 salvage value at the end of its useful life. What is the depreciation expense for 2022 if Sandhill Co. uses the straight-line method of depreciation?

$10350.

$20700.

$4050.

$5175.

2.A plant asset was purchased on January 1 for $59200 with an estimated salvage value of $15000 at the end of its useful life. The current year's depreciation expense is $3400 calculated on the straight-line basis and the balance of the Accumulated Depreciation account at the end of the year is $23800. The remaining useful life of the plant asset is

17 years.

6 years.

13 years.

7 years.

3.A machine that was purchased on January 1 for $70000 has an estimated salvage value of $12000. If the machine’s depreciation rate is 20%, its annual depreciation is

$56000.

$16400.

$11600.

$14000.

4.Carla Vista Co. bought equipment for $140000 on January 1, 2021. Carla Vista estimated the useful life to be 5 years with no salvage value, and the straight-line method of depreciation will be used. On January 1, 2022, Carla Vista decides that the business will use the equipment for a total of 6 years. What is the revised depreciation expense for 2022?

$28000.

$11200.

$18667.

$22400.

5.A company sells a plant asset that originally cost $600000 for $255000 on December 31, 2022. The accumulated depreciation account had a balance of $240000 after the current year's depreciation of $60000 had been recorded. The company should recognize a

$45000 loss on disposal.

$105000 loss on disposal.

$105000 gain on disposal.

$345000 loss on disposal.

6.Cullumber Company incurred $800000 of research and development costs in its laboratory to develop a new product. It spent $150000 in legal fees for a patent granted on January 2, 2022. On July 31, 2022, Cullumber paid $62000 for legal fees in a successful defense of the patent. What is the total amount that should be debited to Patents through July 31, 2022?

$1012000.

$212000.

$0.

$800000.

7.On May 1, 2022, Pharoah Company purchased the copyright to Whispering Winds Corp. for $138000. It is estimated that the copyright will have a useful life of 4 years. The amount of amortization expense recognized for the year 2022 would be

$17250.

$23000.

$34500.

$18400.

8.A company purchased land for $330000 cash. The real estate brokers' commission was $15000 and $54000 was spent for demolishing an old building on the land before construction of a new building could start. Under the historical cost principle, the cost of land is

$399000.

$345000.

$384000.

$330000.

9.Pharoah Clinic purchases land for $450000 cash. The clinic assumes $5500 in property taxes due on the land. The title and attorney fees totaled $2900. The clinic had the land graded for $9000. What amount does Pharoah Clinic record as the cost for the land?

$467400.

$459000.

$458400.

$450000.

10.Blossom Company purchased machinery on January 1 at a list price of $280000, with credit terms 2/10, n/30. Payment was made within the discount period. Blossom paid $90000 sales tax on the machinery and paid installation charges of $4100. Prior to installation, Blossom paid $10100 to pour a concrete slab on which to place the machinery. What is the total cost of the new machinery?

$384200

$368500.

$364400.

$378600.

11.Blossom Company issued bonds that had the following data associated with them:     Interest to be paid is $42000.     Interest expense to be recorded is $47000. Which of the following characteristics is true?

When recording the interest expense, the amortization will increase the bond carrying value.

When recording the interest expense, the amortization will decrease the bond carrying value.

The difference between the interest expense and the interest to be paid is the bond's par value.

The bonds are sold at a premium.

12.On January 1, 2020, Crane Company, a calendar-year company, issued $1520000 of notes payable, of which $380000 is due on January 1 for each of the next four years. The proper balance sheet presentation on December 31, 2020, is:

Current liabilities, $380000; Long-term Debt, $1140000.

Long-term debt, $1520000.

Current liabilities, $380000; Long-term Debt, $760000.

Current liabilities, $1520000.

13.Marigold Corp. does not ring up sales taxes separately on the cash register. Total receipts for February amounted to $36994. If the sales tax rate is 6%, what amount must be remitted to the state for February's sales taxes?

$2086

$2220

It cannot be determined.

$2094

14.Bonds with a face value of $672000 and a quoted price of 104.25 have a selling price of

$699048.

$674856.

$700560.

$698880.

15.Bonds with a face value of $528000 and a quoted price of 98.5 have a selling price of

$518760.

$517704.

$517466.

$520080.

16.A corporation issues $309000, 10%, 5-year bonds on January 1, 2020, for $296100. Interest is paid annually on January 1. If the corporation uses the straight-line method of amortization of bond discount, the amount of bond interest expense to be recognized in December 31, 2020’s adjusting entry is

$28320.

$2580.

$30900.

$33480.

17.Crane Company received proceeds of $685500 on 10-year, 8% bonds issued on January 1, 2019. The bonds had a face value of $650000, pay interest annually on December 31, and have a call price of 108. Crane uses the straight-line method of amortization. What is the carrying value of the bonds on December 31, 2021?

$621600

$650000

$681950

$678400

18.On January 1, Shamrock, Inc. issued $3250000, 9% bonds for $3050000. The market rate of interest for these bonds is 10%. Interest is payable annually on December 31. Sheridan uses the effective-interest method of amortizing bond discount. At the end of the first year, Shamrock should report unamortized bond discount of

$167500.

$169500.

$187500.

$180000.

19.Wildhorse Co. issued $4700000 of 6%, 10-year bonds on one of its interest dates for $4059500 to yield an effective annual rate of 8%. The effective-interest method of amortization is to be used. How much bond interest expense (to the nearest dollar) should be reported on the income statement for the end of the first year?

$324760

$323904

$282000

$325614