JAIL FREE RD es) nandoe income stateme nn neet nows the gain or loss to be 65) s
ID: 2594958 • Letter: J
Question
JAIL FREE RD es) nandoe income stateme nn neet nows the gain or loss to be 65) s an asset, how is the gain or loss to be A) The difference between cash proceeds received and the carrying value of the asset B) The difference between cash proceeds received and the acquisition value of the asset. C) The difference between cash proceeds received and the accumulated depreciation of the asset. D) The difference between the book value of the asset and the carrying value of the asset 66) Which, if any, intangible assets are subject to amortization? A) Only finite-life intangible assets are subject to amortization B) Only indefinite-life intangible assets are subject to amortization. C) Both finite and indefinite-life intangible assets are subject to amortization. D) No intangible assets are subject to amortization. 67) Lunar Products purchased a computer for $13,000 on July 1, 2016. The company intends to depreciate it over 4 years using the double-declining bal lance method. Residual value is $1,000. What is depreciation for 2017 A) $3,000 B) $3,250 C) $4,500 D) $4,875 68) Which of the following errors will be revealed by the unadjusted trial balance? A) A transaction that is not journalized. B) Failing to post one side of a journal entry C) An entry that is posted twice. D) A correct journal entry that is not posted. 69) What type of account is Allowance for Uncollectible Accounts? A) current liability B) expense C) contra asset D) contra revenue 171Page Anakwe-Intermediate I, Fall 2017 Final Exam An 11PageExplanation / Answer
Answer:
65Q)When a firm sells or Abandons an asset ,how is the gain or Loss to be recognized on the income Statement measured?
Answer:
Option A).The difference between cash proceeds received and the carrying value of the Asset.
Explanation with example:
Cost of the Asset = $1,00,000
Accumulated Depreciation =$ 70,000
Carrying value of the asset = cost of Asset -Accumulated Depreciation
=$100,000- $70,000
=$30,000.
If the Asset is sold for $50,000. Then the net profit araised on sale of Asset will be the the difference between the carrying value of the asset and sale proceeds received.
(Profit $20,000=$50,000-$30,000).
66Q).Which, if any, intangible assets are subject to amortization?
Answer: Option A).Only finite-life intangible assets are subject to amortization.
67Q).Lunar products purchased a computer for $13,000 on July 1,2016.The company intends to depreciate it over 4 years using the double declining balance method. Residual value is $1,000.
What is the depreciation for 2017?
Answer:
Option D) $4,875.
Given, Cost =$13,000 ,Salvage value =$1,000 ,Life =4 years ,Factor =2 ,
Depreciation Schedule:
YEAR
BOOK VALUE
YEAR START
DEPRECIATION
%
DEPRECIATION
EXPENSE
ACCUMULATED
DEPRECIATION
BOOK VALUE
YEAR END
2016
$13,000
25.00%
$3,250
$3,250
$9,750
2017
$9,750
50.00%
$4,875
$8,125
$4,875
2018
$4.875
50.00%
$2,438
$10,563
$2,438
2019
$2,438
50.00%
$1,219
$11,781
$1,219
2020
$1,219
17.95%
$219
$12,000
$1,000
68Q).Which of the following errors will be revealed by the unadjusted trial balance?
Answer:
Option:B)Failing to post one side of a journal entry.
69). What type of account is Allowance for Uncollectable Accounts?
Answer: Oprion C)
Explanation:
The allowance for Doubtful Accounts or Uncollectable Accounts is a reduction of the total amount of accounts receivable appearing on a company's balance sheet, and is listed as a deduction immediately below the accounts receivable line item. This deduction is classified as a “contra asset account”.
65Q)When a firm sells or Abandons an asset ,how is the gain or Loss to be recognized on the income Statement measured?
Answer:
Option A).The difference between cash proceeds received and the carrying value of the Asset.
Explanation with example:
Cost of the Asset = $1,00,000
Accumulated Depreciation =$ 70,000
Carrying value of the asset = cost of Asset -Accumulated Depreciation
=$100,000- $70,000
=$30,000.
If the Asset is sold for $50,000. Then the net profit araised on sale of Asset will be the the difference between the carrying value of the asset and sale proceeds received.
(Profit $20,000=$50,000-$30,000).
66Q).Which, if any, intangible assets are subject to amortization?
Answer: Option A).Only finite-life intangible assets are subject to amortization.
67Q).Lunar products purchased a computer for $13,000 on July 1,2016.The company intends to depreciate it over 4 years using the double declining balance method. Residual value is $1,000.
What is the depreciation for 2017?
Answer:
Option D) $4,875.
Given, Cost =$13,000 ,Salvage value =$1,000 ,Life =4 years ,Factor =2 ,
Depreciation Schedule:
YEAR
BOOK VALUE
YEAR START
DEPRECIATION
%
DEPRECIATION
EXPENSE
ACCUMULATED
DEPRECIATION
BOOK VALUE
YEAR END
2016
$13,000
25.00%
$3,250
$3,250
$9,750
2017
$9,750
50.00%
$4,875
$8,125
$4,875
2018
$4.875
50.00%
$2,438
$10,563
$2,438
2019
$2,438
50.00%
$1,219
$11,781
$1,219
2020
$1,219
17.95%
$219
$12,000
$1,000
68Q).Which of the following errors will be revealed by the unadjusted trial balance?
Answer:
Option:B)Failing to post one side of a journal entry.
69). What type of account is Allowance for Uncollectable Accounts?
Answer: Oprion C)
Explanation:
The allowance for Doubtful Accounts or Uncollectable Accounts is a reduction of the total amount of accounts receivable appearing on a company's balance sheet, and is listed as a deduction immediately below the accounts receivable line item. This deduction is classified as a “contra asset account”.
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