On January 1, a machine with a useful life of five years and a salvage value of $25,000 was purchased for $125,000.

What is the depreciation expense for year 2 under straight-line depreciation?

a.$15,000.

b.$75,000.

c.$20,000.

d.$60,000.

 

Machinery was purchased for $340,000 on January 1, 2017. Freight charges amounted to $14,000 and

there was a cost of $40,000 for building a foundation and installing the machinery. It is estimated that the

machinery will have a $60,000 salvage value at the end of its 5-year useful life. What is the amount of

accumulated depreciation at December 31, 2018, if the straight-line method of depreciation is used?

a.$133,600.

b.$66,800.

c.$57,200.

d.$114,400.

 

Equipment costing $60,000 with a salvage value of $12,000 and an estimated life of 8 years has been depreciated

using the straight-line method for 2 years. Assuming a revised estimated total life of 5 years and no change in the

salvage value, the depreciation expense for Year 3 would be

a.$7,200.

b.$16,000.

c.$12,000.

d.$9,600.

 

A company sells a plant asset that originally cost $360,000 for $120,000 on December 31, 2017. The accumulated depreciation

account had a balance of $180,000 after the current year's depreciation of $30,000 had been recorded. The company should

recognize a

a.$60,000 loss on disposal.

b.$40,000 gain on disposal.

c.$120,000 loss on disposal.

d.$120,000 gain on disposal.

 

A plant asset cost $192,000 and is estimated to have a $24,000 salvage value at the end of its 8-year useful life. The annual

depreciation expense recorded for the third year using the double-declining-balance method would be

a.$16,080.

b.$27,000.

c.$23,625.

d.$18,375.

 

West County Bank agrees to lend Drake Builders Company $400,000 on January 1. Drake Builders Company signs a $400,000,

6%, 6-month note. What is the adjusting entry required if Drake Builders Company prepares financial statements on March 30?

a.Interest Expense

12,000

Interest Payable

12,000

b.Interest Expense

12,000

Cash

12,000

c.Interest Expense

6,000

Interest Payable

6,000

d.Interest Payable

6,000

Interest Expense

6,000

 

Five thousand bonds with a face value of $1,000 each, are sold at 102. The entry to record the issuance is

a.Cash

5,100,000

Bonds Payable

5,100,000

b.Cash

5,000,000

Premium on Bonds Payable

100,000

Bonds Payable

5,100,000

c.Cash

5,100,000

Premium on Bonds Payable

100,000

Bonds Payable

5,000,000

d.Cash

5,100,000

Discount on Bonds Payable

100,000

Bonds Payable

5,000,000

 

 

In a recent year Hart Corporation had net income of $155,000, interest expense of $30,000, and income tax expense of $40,000.

What was Hart Corporation’s times interest earned for the year?

a.7.50

b.5.17

c.6.17

d.6.50

 

 

Watson, Inc. has 10,000 shares of 5%, $100 par value, cumulative preferred stock and 20,000 shares of $1 par

value common stock outstanding at December 31, 2017. There were no dividends declared in 2015. The board of

directors declares and pays a $90,000 dividend in 2016 and in 2017. What is the amount of dividends received by

the common stockholders in 2017?

a.$30,000.

b.$40,000.

c.$50,000.

d.$0.

 

A company had net income of $282,000. Depreciation expense is $26,000. During the year, accounts receivable and inventory

increased $15,000 and $40,000, respectively. Prepaid expenses and accounts payable decreased $2,000 and $14,000,

respectively. There was also a loss on the sale of equipment of $17,000. How much cash was provided by operating activities?

a.$258,000.

b.$241,000.

c.$318,000.

d.$339,000.

Answer rating: 100% (QA)

Answer 1 Option B is correct b75000 Depreciation expense refers to the expenses that are charged to fixed assets based on how much the assets get consumed during the accounting period according to the ... View the full answer