1.Your company buys a computer server, which it expects to use for eight years and then sell when it upgrades to a more powerful model. The server would probably be used by the business that buys it at that time for another three years. The useful life of the server for your company is:

eleven years

none of the above

the total length of time the server is used to produce output for your company.

three years

the total length of time until the server can no longer function.

2.

On May 1, 2015, Casico Toy Inc. purchased a new piece of equipment that cost $52,000. The estimated useful life is five years and the estimated residual value is $ 4,000. During the five years of useful life the equipment is expected to produce 20,000 units.

Assume that the equipment was purchased on January 1st, 2015. If the company uses the double declining balance method of depreciation, what is the depreciation expense for the year ended December 31st, 2018?

$ 3,250

$ 750

$3,000

None of the other alternatives are correct

$ 0

3.Kingston Company purchased a machine on January 1, 2015 for $24,000. There is no salvage value and the machine is expected to last ten years. Management typically records depreciation at year end (December 31). On March 1, 2016 Kingston Company sells the machine for $5,000.

What is the appropriate journal entry to record the sale of the machine?

None of the other alternatives are correct

Dr. Accumulated depreciation $4,800. Dr. Cash $5,000. Dr. Loss on Disposal $14,200 Cr. Machine $24,000

Dr. Accumulated depreciation $2,800. Dr. Cash $5,000. Dr. Loss on Disposal $16,200. Cr. Machine $24,000

Dr. Accumulated depreciation 2,400. Dr. Cash $5,000. Dr. Loss on Disposal $16,600. Cr. Machine $24,000

Dr. Accumulated depreciation $2,800. Dr. Machine $24,000. Cr. Loss on disposal $26,800

4.Which of the following is correct regarding "Goodwill"?

Goodwill represents the excess of the cost of an acquired enterprise over the net of the amounts assigned to assets acquired and liabilities assumed a value set by an independent appraiser

Goodwill is a type of intangible asset recorded on the balance sheet

Goodwill represents the excess of the cost of an acquired enterprise over the net of the amounts assigned to assets acquired; liabilities are ignored

None of the other alternatives are correct

Goodwill may only be recognized when a business is sold

5.Amazing Race Incorporated has decided to sell its 2-year-old helicopter, which is currently advertised in a local newspaper and online. The price for the helicopter is set at $70,000 whereas a new helicopter is $85,000. An independent appraiser has confirmed that a price of $70k for the used helicopter is reasonable. Management expects to find a buyer within 12 months.

Which of the following is true regarding the potential sale of the helicopter by Amazing Race Incorporated?

Amazing Race Incorporated should ensure the helicopter is the last asset listed on the balance sheet under the heading "Assets".

Amazing Race Incorporated should continue depreciating the helicopter

None of the other alternatives are correct

Amazing Race Incorporated should show the helicopter on its balance sheet at NRV

Amazing Race should remove the helicopter from its books