ACCT 701 Module 5 Assessment Review 2018_Use of managerial accounting data

Module 5 Assessment Review 2018 9/9
Question 1
On 2015 January 1, Jackson Company purchased equipment for $400,000, and installation and
testing costs totalled $40,000. The equipment has an estimated useful life of 10 years and an
estimated salvage value of $40,000. If Jackson uses the straight-line depreciation method, the
depreciation expense for 2015 is:
Select one:
a. $36,000.

b. $80,000.

c. $44,000.

d. $88,000.

e. $40,000.


Question 2
On July 1, 2015, Jackson Company purchased equipment for $400,000, and installation and testing
costs totaled $40,000. The equipment has an estimated useful life of 10 years and an estimated
salvage value of $40,000. If Jackson uses the double-declining-balance method, the depreciation
expense for 2015 would be:
Select one:
a. $44,000.

b. $88,000.

c. $40,000.

d. $72,000.

e. $36,000.


Question 3
Hatfield Company purchased a computer on January 1, 2013 for $10,000. The computer had an
estimated salvage value of $3,000 and an estimated useful life of five years. At the beginning of
2015, the estimated salvage value changed to $1,000, and the computer is expected to have a
remaining useful life of two years. The company always uses the straight-line method of
depreciation. What is the depreciation expense for 2015?
Select one:
a. $1,400.

b. $1,750.

c. $2,250.




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