D. Multiple Choice
Instructions: Put the best answer for each of the following questions in the blank.
	1. The depreciation method that would provide the highest reported income in the early years
	of an asset's life would be:
	a. straight-line
	b. declining-balance
	c. 150% straight-line
	d. accelerated
	2. Equipment with an estimated useful life of 5 years and an estimated residual value of $1,000 is
	acquired at a cost of $15,000. Using the declining balance method (at twice the straight-line rate),
	what is the amount of depreciation for the first year of use of the equipment?
	a. $2,600
	b. $3,000
	c. $5,600
	d. $6,000
	3. Equipment that cost $20,000 is estimated to have a useful life of 5 years and a
	residual value of $2,000. The equipment has been depreciated for 2 years using straight-line
	depreciation. The depreciation expense on the equipment in year 3 using the
	straight-line method would be:
	a. $3,600
	b. $5,900
	c. $6,000
	d. $7,500
	4. The depreciation method used most often in the financial statements is the:
	a. straight-line method
	b. declining-balance method
	c. units-of-production method
	d. MACRS method
	5. Old equipment which cost $11,000 and has accumulated depreciation of $6,300 is
	given, along with $9,000 in cash, for the same type of new equipment with a price of $15,600.
	At what amount should the new equipment be recorded?
	a. $15,600
	b. $15,300
	c. $13,700
	d. $9,000
	6. Assume the same facts as in No. 5, except that the old equipment and $11,500 in cash is
	given for the new equipment. At what amount should the new equipment be recorded for
	financial accounting purposes?
	a. $16,200
	b. $15,600
	c. $11,500
	d. $10,900
	7. In a lease contract, the party who legally owns the asset is the:
	a. contractor
	b. operator
	c. lessee
	d. lessor
	8. Which of the following items would not be considered an intangible asset?
	a. mineral ore deposits
	b. patent
	c. copyright
	d. goodwill