30. On January 1, a machine with a useful life of four years and a residual valu
ID: 2494292 • Letter: 3
Question
30. On January 1, a machine with a useful life of four years and a residual value of $9,000 was purchased for $57,000. What is the depreciation expense for year 2 under straight-line depreciation?
a. $6,000.
b. $12,000.
c. $24,000.
d. $14,250.
31. Equipment that cost $54,000 and on which $30,000 of accumulated depreciation has been recorded was disposed of for $27,000 cash. The entry to record this event would include a
a. gain of $3,000.
b. loss of $3,000.
c. credit to the Equipment account for $9,000.
d. credit to Accumulated Depreciation for $30,000.
32. Visson Corporation has current assets of $1,500,000 and current liabilities of $750,000. What’s their current ratio?
a. 2:1
b. 3.2:1
c. 1.69:1
d. 2.7:1
33. Trademarks are generally shown on the balance sheet under
a. Intangibles.
b. Investments.
c. Property, Plant, and Equipment.
d. Current Assets.
34. Sales taxes collected by a retailer are reported as
a. contingent liabilities.
b. revenues.
c. expenses.
d. current liabilities.
35. Yanik Corporation issues 4,000, 10-year, 8%, $1,000 bonds dated January 1, 2014, at 97. The amount received for the issuance is
a. $3,880,000
b. $3,970,000
c. $4,000,000
d. $4,120,000
36. If the market rate of interest is lower than the contractual interest rate, the bonds will sell at
a. face value.
b. a premium.
c. a discount.
d. an unknown amount.
37. Alt Corp. issues 3,000 shares of $10 par value common stock at $14 per share. When the transaction is recorded, credits are made to:
a. Common Stock $30,000 and Paid-in Capital in Excess of Stated Value $12,000.
b. Common Stock $28,000.
c. Common Stock $30,000 and Paid-in Capital in Excess of Par Value $12,000.
d. Common Stock $30,000 and Retained Earnings $12,000.
38. The effect of the declaration of a cash dividend by the board of directors is to
Increase Decrease
a. Stockholders’ equity Assets
b. Assets Liabilities
c. Liabilities Stockholders’ equity
d. Liabilities Assets
39. Racer Corporation’s December 31, 2014 balance sheet showed the following:
8% preferred stock, $20 par value, cumulative,
40,000 shares authorized; 20,000 shares issued $ 400,000
Common stock, $10 par value, 4,000,000 shares authorized;
2,600,000 shares issued, 2,560,000 shares outstanding 26,000,000
Paid-in capital in excess of par value – preferred stock 80,000
Paid-in capital in excess of par value – common stock 36,000,000
Retained earnings 10,200,000
Treasury stock (30,000 shares) 840,000
Racer’s total stockholders’ equity was
a. $73,520,000.
b. $62,480,000.
c. $72,680,000.
d. $71,840,000.
40. The order of presentation of activities on the statement of cash flows is
a. operating, investing, and financing.
b. operating, financing, and investing.
c. financing, operating, and investing.
d. financing, investing, and operating.
Explanation / Answer
Solution:
Question 30 Per year Depreciation = $ 57,000- $ 9,000 / 4 12,000 Depreciation for 2 years 24,000 Therefore, the answer to the above question is c. $ 24,000 Question 31 Book Value = Purchase price - Depreciation 24000 Sale value 27,000 Gain 3,000 Therefore, the answer to the above question is a. $ 3,000 Question 32 Current Ratio = Current Assets / Current Liabilities Current Assets 1,500,000 Current Liabilities 750,000 Current Ratio= 2 Answer - a. 2:1 Question 33 Trademarks are included in Intangibles assets in balance sheet. Therefore the answer to the question is a. IntangiblesRelated Questions
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