ACC 291T Wk 5 - Apply: Connect Homework (2021.7 New)

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ACC 291T Wk 5 - Apply: Connect Homework (2021.7 New)

Mohr Company purchases a machine at the beginning of the year at a cost of $43,000. The machine is depreciated using the straight-line method. The machine’s useful life is estimated to be 5 years with a $7,000 salvage value. The book value of the machine at the end of year 2 is:

Multiple Choice

$36,000.

$28,600.

$7,200.

$21,600.

$14,400.

A company had a tractor destroyed by fire. The tractor originally cost $143,000 with accumulated depreciation of $76,200. The proceeds from the insurance company were $38,000. The company should recognize:

Multiple Choice

A loss of $66,800.

A loss of $28,800.

A gain of $28,800.

A gain of $66,800.

A gain of $38,000.

Merchant Company purchased property for a building site. The costs associated with the property were:

Purchase price$     189,000

Real estate commissions      16,400

Legal fees            2,200

Expenses of clearing the land      3,400

Expenses to remove old building        2,400

________________________________________

What portion of these costs should be allocated to the cost of the land and what portion should be allocated to the cost of the new building?

Multiple Choice

$207,600 to Land; $2,400 to Building.

$213,400 to Land; $0 to Building.

$191,200 to Land; $24,400 to Building.

$211,000 to Land; $0 to Building.

Martin Company purchases a machine at the beginning of the year at a cost of $70,000. The machine is depreciated using the double-declining-balance method. The machine’s useful life is estimated to be 4 years with a $5,800 salvage value. The machine’s book value at the end of year 3 is:

Multiple Choice

$8,750.

$52,500.

$61,250.

$8,013.

$35,000.

An asset's book value is $32,400 on January 1, Year 6. The asset is being depreciated $450 per month using the straight-line method. Assuming the asset is sold on July 1, Year 7 for $23,800, the company should record:

Multiple Choice

Neither a gain or loss is recognized on this type of transaction.

A gain on sale of $500.

A loss on sale of $500.

A loss on sale of $250.

A gain on sale of $250.