Question $4$

$2$ Points

The recoverability test compares

the cost of the asset to its carrying value.

the carrying value of the asset to its undiscounted expected future net cash flows.

the carrying value of the asset to its discounted expected future net cash flows.

the fair value of the asset to its carrying value.

Question $5$

Question $5$

$2$ Points

A machine with an eight$-$year estimated useful life and an estimated $10\%$ salvage value was acquired on January $1,2024.$ The depreciation expense for $2026$ using the double$-$declining balance method would be the original cost multiplied by

$90\%25\%25\%.$

$75\%75\%25\%.$

$90\%75\%25\%.$

$25\%25\%.$

Question $6$

Question $6$

$2$ Points

Muchachi Company purchased factory equipment for $$640,000$ on January $1.$ The asset$$s$$useful life in hours is estimated to be $175,000.$ The estimated salvage value is $$45,000$and the estimated useful life is $8$ years. The machine was used for $19,000$ hours in the$$first year. If the activity method is used, what is depreciation expense for the first year of$$the asset$$s life?

$$74,375$

$$80,000$

$$64,600$

$$69,485$

Question $7$

Question $7$

$2$ Points

A depreciable asset has an estimated $15\%$ salvage value. At the end of its estimated useful life, the accumulated depreciation would equal the original cost of the asset under which of the following depreciation methods?

$$Straight$-$line$$Productive Output

Yes$$No

Yes$$Yes

No$$Yes

No$$No

Question $8$

Question $8$

$2$ Points

Net income is understated if$,$ in the first year, estimated salvage value is excluded from

$$the depreciation computation when using the

$$Straight$-$line$$Production or

$$Method$$Use Method

Yes$$No

Yes$$Yes

No$$No

No$$Yes

Question $9$

Question $9$

$2$ Points

Hoksi Corporation purchased equipment for $$725,000$ in $2025.$ Two years later, the$$equipment has accumulated depreciation of $$225,000$ and Hoksi has concerns that the$$equipment has been impaired. Future cash flows are estimated to be $$480,000.$ The$$controller believes the current fair value of the equipment to be approximately $$425,000.$The journal entry to record the impairment loss on the equipment will include

credit to Accumulated Depreciation $$ Equipment for $$20,000.$

credit to Loss on Impairment for $$75,000.$

credit to Accumulated Depreciation $$ Equipment for $$75,000.$

no impairment has occurred, so no journal entry is required.

Question $10$

Question $10$

$2$ Points

Piazza Co$.$ purchased a machine on July $1,2025,$ for $$1,000,000.$ The machine has an estimated useful life of five years and a salvage value of $$200,000.$ The machine is being depreciated from the date of acquisition by the $150\%$ declining$-$balance method. For the year ended December $31,2025,$ Piazza should record depreciation expense on this machine of

$$300,000.$

$$200,000.$

$$150,000.$

$$120,000.$