1. On October 1, 2014, Holt Company places a new asset into service. The cost of the asset is $120,000 with an estimated 5-year life and $30,000 salvage value at the end of its useful life. What is the book value of the plant asset on the December 31, 2014, balance sheet assuming that Holt Company uses the double-declining-balance method of depreciation?

a) $90,000

b) $108,000

c) $114,000

d) $78,000

2. A company sells a plant asset which originally cost $360,000 for $120,000 on December 31, 2014. The Accumulated Depreciation account had a balance of $144,000 after the current year's depreciation of $36,000 had been recorded. The company should recognize a

a) $96,000 gain on disposal.

b) $240,000 loss on disposal.

c) $96,000 loss on disposal.

3. A company receives $696, of which $56 is for sales tax. The journal entry to record the sale would include a

a) Debit to Sales Revenue for $696.

b) Debit to Sales Taxes Payable for $56.

c) Debit to Cash for $696.

d) Debit to Sales Tax Expense for $56.

Answer rating: 100% (QA)

1 b 108000 2 ... View the full answer