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PDtax, Other
Category: Multiple Problems
Satisfied Customers: 1553
Experience:  Former college tutor and instructor. MBA/CPA, current business consultant/tax pro/writer.
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# Please correct if wrong.An asset is purchased for \$50,000.

### Resolved Question:

An asset is purchased for \$50,000. It has an estimated useful life of 12 years and a salvage value of \$5,000. What is the annual depreciation of the asset using the straight-line method?

A. \$3,750.00

B. \$4,000.00

C. \$4,500.00 ✓

D. \$4,583.33 Reset Selection

An asset purchased by Able Corporation for \$15,000 on 01/01/1997 also incurred freight charges of \$200 and installation cost of \$1,000. The asset had a life expectancy of eight years and a salvage value of \$2,800. What are the accumulated straight-line depreciation and book value on 01/01/2000?

A. \$1,675; \$9,975

B. \$5,025; \$11,175

C. \$1,875; 10,575

D. \$6,075; \$10,125 Reset Selection✓

Parker Inc. purchased a \$30,000 asset with a salvage value of \$1,200 and an estimated useful life of three years.Â Â What isÂ the book value at the end of years one and two using the 150% declining balance method?

A. \$30,000 and \$15,000

B. \$25,000 and \$15,000

C. \$30,000 and \$7,500

D. \$15,000 and \$7,500 Reset Selection✓

An asset is purchased for \$50,000. It has an estimated useful life of eight years and salvage value of \$6,000. If the asset is depreciated using the double-declining balance method, what are the depreciation expense and book value at the end of year two?

A. \$5,468.75; \$38,281.25 ✓
B. \$8,250; \$30,750

C. \$9,375; \$28,125

D. \$11,000; \$28,000 Reset Selection

A machine costs \$40,000, has a salvage value of \$8,000, and is expected to have a useful life of 100,000 hours. If it is utilized for a total of 8,000 hours in year one, what is the depreciation expense based on the unit-of-production-method at the end of the year?

A. \$2,560 ✓

B. \$3,200

C. \$4,000

D. \$25,000

Baker Company purchases a new delivery truck for \$20,000. The truck is expected to have a useful life of 90,000 miles before replacement, and a salvage value of \$2,000. In its first year the truck was driven 22,000 miles, and a further 19,000 miles in year two. WhatÂ is the depreciation expense and book value at the end of year two?

A. \$3,800; \$11,800

B. \$4,400; \$11,200

C. \$4,222.22; \$10,888.88

D. \$8,200; \$9,800 ✓

A delivery truck is purchased for \$38,000, has a salvage value of \$6,000 and is depreciated using MACRS. What is the first-year depreciation expense?

A. \$4,578.80

B. \$5,430.20

C. \$7,600.00 ✓

D. \$15,200.00

Dennison Property Company purchases a new office space for lease to small businesses for \$2,400,000, including a land value of \$400,000. The property is placed in service on March 15, 1999. Using MACRS, what is the Â depreciation on this property at the end of its first year?

A. \$40,660 ✓

B. \$43,656

C. \$50,260

D. \$57,850 Reset Selection

This one I am unsure of the calculation..

The periodic deduction allowed by the Internal Revenue Service to recover the cost of a business asset that is used more than one year is called:

A. depreciated value.

B. recovered cost.

C. specific cost.

D. depreciation.✓

The amount of the periodic deduction is reported as _________ in the income statement and as an increase in the _________ of the asset in the balance sheet.

A. a decrease in asset value; value

B. the current cost estimate; residual value

C. depreciation expense; accumulated depreciation ✓

D. actual value; depreciation Reset Selection

The _________ of an asset is the value reported in the balance sheet after deducting the accumulated depreciation from the total cost of the asset when it is placed in service.

A. book value ✓

B. retail price

C. average cost

D. specific cost Reset Selection

The _________ method of depreciation allows a business to evenly distribute the cost of as asset over its useful life.

A. units of production

B. straight-line ☑

C. sum-of-years’-digits

D. declining-balance Reset Selection

_________ is used to depreciate assets when the actual service rendered by the asset is a more appropriate base for depreciation than its years of service.

A. declining-balance

B. sum-of-years’-digits

C. units of production

D. MACRS Reset Selection✓

_________ property is land and generally anything that is erected on, growing on, or attached to the land.

A. Useful

B. Tangible

C. Intangible

D. Real Reset Selection✓

An asset’s purchase cost plus freight and/or installation charges required to place the asset into service is called the:

A. market value ❏✓

B. salvage value

C. total cost

D. cost base Reset Selection

Under MACRS, the type of recovery property being depreciated determines which _________ will be used to determine the recovery amount.

A. method ✓

B. value

C. class

D. cost base Reset Selection

The _________ system is also known as the General Depreciation System and applies to all tangible property placed in service after 1986.

A. asset valuation

B. fair market

C. modified accelerated cost recovery ✓

D. residual value Reset Selection

The book value at the end of an asset’s useful life should always be equal to its _________ value.

A. residual

B. salvage ✔

C. market

D. depreciated Reset Selection

Under MACRS, the _________ treats all property as being placed in service on the midpoint of the years regardless of when the property is actually placed in service.

A. valuation schedule

B. depreciation schedule

C. half-year convention ✔

D. cost base Reset Selection

The _________ method of depreciation is considered an accelerated method of depreciating assets.

A. units of production

B. straight-line

C. modified production

D. declining-balance Reset Selection ✔
Submitted: 1 month ago.
Category: Multiple Problems
Expert:  PDtax replied 1 month ago.
Hi from Just Answer. I'm PDtax, and will be assisting today.

Expert:  PDtax replied 1 month ago.

An asset is purchased for \$50,000. It has an estimated useful life of 12 years and a salvage value of \$5,000. What is the annual depreciation of the asset using the straight-line method?

A. \$3,750.00 XXXXXX

B. \$4,000.00

C. \$4,500.00 ✓NO

D. \$4,583.33 Reset Selection

An asset purchased by Able Corporation for \$15,000 on 01/01/1997 also incurred freight charges of \$200 and installation cost of \$1,000. The asset had a life expectancy of eight years and a salvage value of \$2,800. What are the accumulated straight-line depreciation and book value on 01/01/2000?

A. \$1,675; \$9,975

B. \$5,025; \$11,175 XXXXXX

C. \$1,875; 10,575

D. \$6,075; \$10,125 Reset Selection✓ NO

Parker Inc. purchased a \$30,000 asset with a salvage value of \$1,200 and an estimated useful life of three years.Â Â What is the book value at the end of years one and two using the 150% declining balance method?

A. \$30,000 and \$15,000

B. \$25,000 and \$15,000

C. \$30,000 and \$7,500

D. \$15,000 and \$7,500 Reset Selection✓

An asset is purchased for \$50,000. It has an estimated useful life of eight years and salvage value of \$6,000. If the asset is depreciated using the double-declining balance method, what are the depreciation expense and book value at the end of year two?

A. \$5,468.75; \$38,281.25 ✓NO
B. \$8,250; \$30,750

C. \$9,375; \$28,125 XXXXXX

D. \$11,000; \$28,000 Reset Selection

A machine costs \$40,000, has a salvage value of \$8,000, and is expected to have a useful life of 100,000 hours. If it is utilized for a total of 8,000 hours in year one, what is the depreciation expense based on the unit-of-production-method at the end of the year?

A. \$2,560 ✓

B. \$3,200

C. \$4,000

D. \$25,000

Baker Company purchases a new delivery truck for \$20,000. The truck is expected to have a useful life of 90,000 miles before replacement, and a salvage value of \$2,000. In its first year the truck was driven 22,000 miles, and a further 19,000 miles in year two. What is the depreciation expense and book value at the end of year two?

A. \$3,800; \$11,800

B. \$4,400; \$11,200

C. \$4,222.22; \$10,888.88

D. \$8,200; \$9,800 ✓

A delivery truck is purchased for \$38,000, has a salvage value of \$6,000 and is depreciated using MACRS. What is the first-year depreciation expense?

A. \$4,578.80

B. \$5,430.20

C. \$7,600.00 ✓

D. \$15,200.00

Dennison Property Company purchases a new office space for lease to small businesses for \$2,400,000, including a land value of \$400,000. The property is placed in service on March 15, 1999. Using MACRS, what is the depreciation on this property at the end of its first year?

A. \$40,660 ✓

B. \$43,656

C. \$50,260

D. \$57,850 Reset Selection

This one I am unsure of the calculation..

The periodic deduction allowed by the Internal Revenue Service to recover the cost of a business asset that is used more than one year is called:

A. depreciated value.

B. recovered cost.

C. specific cost.

D. depreciation.✓

The amount of the periodic deduction is reported as _________ in the income statement and as an increase in the _________ of the asset in the balance sheet.

A. a decrease in asset value; value

B. the current cost estimate; residual value

C. depreciation expense; accumulated depreciation ✓

D. actual value; depreciation Reset Selection

The _________ of an asset is the value reported in the balance sheet after deducting the accumulated depreciation from the total cost of the asset when it is placed in service.

A. book value ✓

B. retail price

C. average cost

D. specific cost Reset Selection

The _________ method of depreciation allows a business to evenly distribute the cost of as asset over its useful life.

A. units of production

B. straight-line ☑

C. sum-of-years’-digits

D. declining-balance Reset Selection

_________ is used to depreciate assets when the actual service rendered by the asset is a more appropriate base for depreciation than its years of service.

A. declining-balance

B. sum-of-years’-digits

C. units of production XXXXXX

D. MACRS Reset Selection✓NO

_________ property is land and generally anything that is erected on, growing on, or attached to the land.

A. Useful

B. Tangible

C. Intangible

D. Real Reset Selection✓

An asset’s purchase cost plus freight and/or installation charges required to place the asset into service is called the:

A. market value ❏✓NO

B. salvage value

C. total cost XXXXXX

D. cost base Reset Selection

Under MACRS, the type of recovery property being depreciated determines which _________ will be used to determine the recovery amount.

A. method ✓NO

B. value

C. class XXXXXX

D. cost base Reset Selection

The _________ system is also known as the General Depreciation System and applies to all tangible property placed in service after 1986.

A. asset valuation

B. fair market

C. modified accelerated cost recovery ✓

D. residual value Reset Selection

The book value at the end of an asset’s useful life should always be equal to its _________ value.

A. residual

B. salvage ✔

C. market

D. depreciated Reset Selection

Under MACRS, the _________ treats all property as being placed in service on the midpoint of the years regardless of when the property is actually placed in service.

A. valuation schedule

B. depreciation schedule

C. half-year convention ✔

D. cost base Reset Selection

The _________ method of depreciation is considered an accelerated method of depreciating assets.

A. units of production

B. straight-line

C. modified production

D. declining-balance Reset Selection ✔

All the questions are marked answered, need a verification if they are right, please.

I MARKED MY ANSWERS WITH XXXXXX IF I DISAGREED WITH YOURS.

PDtax, Other
Satisfied Customers: 1553
Experience: Former college tutor and instructor. MBA/CPA, current business consultant/tax pro/writer.

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