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UMUC - ACCT 220 6981 Principles of Accounting I (2158) Quiz 3 Due by Thursday, October 29, 2015 (11:59 pm EST) Name: Date: This quiz consists of 3 multiple choice questions and 4 problems. All parts must be completed. Instructions: - Complete this quiz in one sitting. This quiz is to be completed without the assistance of any other person. You may use only the resources provided by your instructor for this class. You may create an Excel and / or Word File for your work. Please verify that each page prints out formatted with your name and page number on the page. - Save your work (include your name in the filename) and upload for grading. - You may only submit this quiz once. I pledge on my honor that I have not given or received any unauthorized assistance on this examination. In addition, I pledge that I will not disclose to, or discuss the contents of this examination with, students who have not taken it. _________________________________________________________________________ Signed Page 1 of 4 UMUC - ACCT 220 6981 Principles of Accounting I (2158) Quiz 3 Multiple Choice (7 points each) 1. On January 1, 20X1, Blake Company purchased a patent for $68,000. The patent has a remaining legal life of nine years and an expected service life of eight years. The amortization expense (to the nearest dollar) properly recognized for 20X1 is: A. B. C. D. E. $0. $3,400. $7,556. $8,500. None of these. 2. Which of the following transactions would cause a change in total stockholders' equity? A. B. C. D. E. A stock dividend. Paying a previously declared cash dividend. Reissuing treasury stock at its cost. A stock split. None of these. 3. Normally, the payment of a previously declared dividend will result in: A. B. C. D. E. a decrease in liabilities. a decrease in working capital. a decrease in stockholders' equity. All of the above. None of these. Page 2 of 4 UMUC - ACCT 220 6981 Principles of Accounting I (2158) Quiz 3 Problem #1 (15 points) Hogan Company sold equipment for $6,000 which cost $8,000 and had accumulated depreciation of $5,500. What is the proper journal entry to record this transaction? Problem #2 (15 points) Hector Company sold equipment, for $1,000 which cost $8,000 and had accumulated depreciation of $5,500. What is the proper journal entry to reflect this transaction? Problem #3 (15 points) Gaines originally issued 15,000 shares of $10 par value common stock at $15 per share. During the current year, 1,000 of these shares were reacquired for $20 each. What is the proper journal entry to record the reacquisition? Page 3 of 4 UMUC - ACCT 220 6981 Principles of Accounting I (2158) Quiz 3 Problem #4 (34 points) On January 1, 2015 Jett Inc. purchased equipment for $154,000 in cash. The equipment is expected to have an operating life of 4 years. The estimated salvage value is $25,000. Required: 1. Using the straight-line method of depreciation: a. Determine the annual depreciation expense for 2015 and 2016. b. Determine the accumulated depreciation at the end of each of the following years: 2015 and 2016. c. Show how the asset and related accumulated depreciation would appear on the balance sheet at December 31, 2016. d. Prepare the journal entries to record the asset's acquisition and annual depreciation expense for 2015 and 2016. 2. Using the double-declining balance method of depreciation: a. Determine the annual depreciation expense for 2015 and 2016. b. Determine the accumulated depreciation at the end of each of the following years: 2015 and 2016. c. Show how the asset and related accumulated depreciation would appear on the balance sheet at December 31, 2016. Page 4 of 4