BUS_Accounting

BUS_Accounting.

1.

Ron’s Quik Shop bought equipment for \$140,000 on January 1, 2021. Ron estimated the useful life to be 5 years with no salvage value, and the straight-line method of depreciation will be used. On January 1, 2022, Ron decides that the business will use the equipment for a total of 6 years. What is the revised depreciation expense for 2022?

 A. \$18,666 B. \$11,200 C. \$28,000 D. \$22,400

2.

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On January 1, a machine with a useful life of five years and a salvage value of \$25,000 was purchased for \$125,000. What is the depreciation expense for year 2 under straight-line depreciation?

 A. \$15,000 B. \$60,000 C. \$20,000 D. \$75,000

3.

Machinery was purchased for \$340,000. Freight charges amounted to \$14,000 and there was a cost of \$40,000 for building a foundation and installing the machinery. It is estimated that the machinery will have a \$60,000 salvage value at the end of its 5-year useful life. Depreciation expense each year using the straight-line method will be

 A. \$66,800. B. \$57,200. C. \$78,800. D. \$56,000.

4.

An asset was purchased for \$400,000. It had an estimated salvage value of \$80,000 and an estimated useful life of 10 years. After 5 years of use, the estimated salvage value is revised to \$64,000 but the estimated useful life is unchanged. Assuming straight-line depreciation, depreciation expense in Year 6 would be

 A. \$33,600. B. \$35,200. C. \$48,000. D. \$24,000.

5.

Which of the following is not an advantage of leasing a long-term asset?

 A. reduced risk of obsolescence B. no depreciation C. shared tax benefits D. lower down payment

BUS_Accounting