ACC Final exam p5
Study online at https://quizlet.com/_45ma1v
1. Which of the following is a capital expenditure Sales tax paid
in conjunction with
the purchase of of-
fice equipment
2. The cost of a new windshield wiper on a delivery A revenue expen-
vehicle would be classified as diture
3. If an asset is determined to be impaired, it should be Written down to its
fair market value
4. On March 2, 2017, Glen Industries purchased a fleet $385,000.
of automobiles at a cost of $550,000. The cars are to ($550,000/5) =
be depreciated by the straight-line method over five $110,000/2 =
years with no salvage value. Glen uses the half-year $55,000 (year 1);
convention to compute depreciation for fractional pe- ($550,000/5) =
riods. The book value of the fleet of automobiles at $110,000 (year 2);
December 31, 2017, will be Book value
= $550,000
- $55,000 -
$110,000 =
$385,000
5. On April 8, 2017, Jupitor Corp. acquired equipment at $60,000.
a cost of $480,000. The equipment is to be depreciated ($480,000/6) ×
by the straight-line method over six years with no 9/12 = $60,000
provision for salvage value. Depreciation for fractional
years is computed by rounding the ownership period
to the nearest month. Depreciation expense recog-
nized in 2017 will be
6. Employers are required to pay all of the following on Health insurance
the wages paid to each employee except benefits
7. Declining-Balance Method Depreciation in the
early years of an
asset's estimated
useful life is higher
than in later years
1/5
, ACC Final exam p5
Study online at https://quizlet.com/_45ma1v
8. On April 30, 2017, Tilton Products purchased machin- $11,000 in 2017
ery for $88,000. The useful life of this machinery is and $19,250 in
estimated at 8 years, with an $8,000 residual value 2018.
Refer to the information above. Assume that in its fi- $88,000 × 2/8
nancial statements, Tilton Products uses the 200%-de- = $22,000/2 =
clining-balance method and the half-year convention. $11,000 in 2017
Depreciation expense in 2017 and 2018 will be and $77,000 × 2/8
= $19,250 in 2018
9. Sanford Corporation borrowed $90,000 by issuing a $90,900.
12%, six-month note payable, all due at the maturity $90,000 +
date. After one month, the company's total liability for ($90,000 × 12% ×
this loan amounts to 1/12) = $90,900
10. On September 1, 2018, Able Company purchased a $654,000.
building from Regal Corporation by paying $200,000
cash and issuing a one-year note payable for the bal- $600,000 +
ance of the purchase price. Interest on the note is ($600,000 × .09) =
stated at an annual rate of 9% and is paid at maturity. $654,000
In its December 31, 2018, balance sheet, Able correctly
presented the note and interest payable as follows:
Refer to the information above. How much must Able
pay Regal Corporation on September 1, 2019, when
the note matures
11. A measure of a company s liquidity is The current ratio
12. Capital Any material ex-
Expenditure penditure
that will benefit
several
accounting peri-
ods
To capitalize an
expenditure
means to charge it
to an
asset account
2/5
Study online at https://quizlet.com/_45ma1v
1. Which of the following is a capital expenditure Sales tax paid
in conjunction with
the purchase of of-
fice equipment
2. The cost of a new windshield wiper on a delivery A revenue expen-
vehicle would be classified as diture
3. If an asset is determined to be impaired, it should be Written down to its
fair market value
4. On March 2, 2017, Glen Industries purchased a fleet $385,000.
of automobiles at a cost of $550,000. The cars are to ($550,000/5) =
be depreciated by the straight-line method over five $110,000/2 =
years with no salvage value. Glen uses the half-year $55,000 (year 1);
convention to compute depreciation for fractional pe- ($550,000/5) =
riods. The book value of the fleet of automobiles at $110,000 (year 2);
December 31, 2017, will be Book value
= $550,000
- $55,000 -
$110,000 =
$385,000
5. On April 8, 2017, Jupitor Corp. acquired equipment at $60,000.
a cost of $480,000. The equipment is to be depreciated ($480,000/6) ×
by the straight-line method over six years with no 9/12 = $60,000
provision for salvage value. Depreciation for fractional
years is computed by rounding the ownership period
to the nearest month. Depreciation expense recog-
nized in 2017 will be
6. Employers are required to pay all of the following on Health insurance
the wages paid to each employee except benefits
7. Declining-Balance Method Depreciation in the
early years of an
asset's estimated
useful life is higher
than in later years
1/5
, ACC Final exam p5
Study online at https://quizlet.com/_45ma1v
8. On April 30, 2017, Tilton Products purchased machin- $11,000 in 2017
ery for $88,000. The useful life of this machinery is and $19,250 in
estimated at 8 years, with an $8,000 residual value 2018.
Refer to the information above. Assume that in its fi- $88,000 × 2/8
nancial statements, Tilton Products uses the 200%-de- = $22,000/2 =
clining-balance method and the half-year convention. $11,000 in 2017
Depreciation expense in 2017 and 2018 will be and $77,000 × 2/8
= $19,250 in 2018
9. Sanford Corporation borrowed $90,000 by issuing a $90,900.
12%, six-month note payable, all due at the maturity $90,000 +
date. After one month, the company's total liability for ($90,000 × 12% ×
this loan amounts to 1/12) = $90,900
10. On September 1, 2018, Able Company purchased a $654,000.
building from Regal Corporation by paying $200,000
cash and issuing a one-year note payable for the bal- $600,000 +
ance of the purchase price. Interest on the note is ($600,000 × .09) =
stated at an annual rate of 9% and is paid at maturity. $654,000
In its December 31, 2018, balance sheet, Able correctly
presented the note and interest payable as follows:
Refer to the information above. How much must Able
pay Regal Corporation on September 1, 2019, when
the note matures
11. A measure of a company s liquidity is The current ratio
12. Capital Any material ex-
Expenditure penditure
that will benefit
several
accounting peri-
ods
To capitalize an
expenditure
means to charge it
to an
asset account
2/5
