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ACC 206 Week 2 Quiz Chapter 10

ACC 206 Week 2 Quiz Chapter 10

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ACC 206 Week 2 Quiz Chapter 10 -

Multiple Choice Questions 100

On October 1, 2014, Holt Company places a new asset into service. The cost of the asset is $120,000 with an estimated 5-year life and $30,000 salvage value at the end of its useful life. What is the book value of the plant asset on the December 31, 2014, balance sheet assuming that Holt Company uses the double-declining-balance method of depreciation?

  • $78,000
  • $114,000
  • $108,000
  • $90,000

 

Multiple Choice Question 117     

Drago Company purchased equipment on January 1, 2014, at a total invoice cost of $1,200,000. The equipment has an estimated salvage value of $30,000 and an estimated useful life of 5 years. What is the amount of accumulated depreciation at December 31, 2015, if the straight-line method of depreciation is used?

  • $240,000
  • $468,000
  • $480,000
  • $234,000

 

Multiple Choice Question 161

Nicklaus Company has decided to sell one of its old machines on June 30, 2014. The machine was purchased for $200,000 on January 1, 2010, and was depreciated on a straight-line basis for 10 years with no salvage value. If the machine was sold for $65,000, what was the amount of the gain or loss recorded at the time of the sale?

  • $55,000.
  • $135,000.
  • $115,000.
  • $45,000.

 

Multiple Choice Question 156

Equipment that cost $420,000 and on which $200,000 of accumulated depreciation has been recorded was disposed of for $180,000 cash. The entry to record this event would include a

  • credit to the Equipment account for $220,000.
  • credit to Accumulated Depreciation for $200,000.
  • gain of $40,000.
  • loss of $40,000.

 

Multiple Choice Question 114

Sargent Corporation bought equipment on January 1, 2014. The equipment cost $360,000 and had an expected salvage value of $60,000. The life of the equipment was estimated to be 6 years. The depreciation expense using the straight-line method of depreciation is

  • $70,000.
  • $50,000.
  • None of these answer choices are correct.
  • $72,000.

 

Multiple Choice Question 164

Depletion is

  • the method used to record unsuccessful patents.
  • a decrease in market value of natural resources.
  • the amount of spoilage that occurs when natural resources are extracted.
  • the allocation of the cost of natural resources to expense.

 

Multiple Choice Question 139

The paneling of the body of an open pickup truck would be classified as a(n)

  • revenue expenditure.
  • ordinary repair.
  • addition.
  • improvement.

 

Multiple Choice Question 81

Depreciation is a process of

  • cost allocation.
  • asset valuation.
  • cost accumulation.
  • asset devaluation.

 

Multiple Choice Question 98

The depreciation method that applies a constant percentage to depreciable cost in calculating depreciation is

  • declining-balance.
  • units-of-activity.
  • none of these.
  • straight-line.

 

Multiple Choice Question 59

Which one of the following items is not considered a part of the cost of a truck purchased for business use?

  • Sales tax
  • Freight charges
  • Cost of lettering on side of truck
  • Truck license

 

 

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