Cashback Offer (20th - 30th September 2020). Get Flat 10% Cashback credited in your account on a minimum transaction of $80. Post Your Question

Question DetailsNormal
$ 19.00

COMPREHENSIVE EXAMINATION C

Question posted by
Online Tutor Profile
request

COMPREHENSIVE EXAMINATION C

COMPREHENSIVE EXAMINATION C

PART 3

(Chapters 10–14)

 

 

Problem C-I — Multiple Choice — Tangible and Intangible Assets.

Choose the best answer for each of the following questions and enter the identifying letter in the space provided.

 

____    1.    When the sum-of-the-years'-digits method is used, depreciation expense for a given asset will

a.   decline by a constant amount each year.

b.   be the same each year.

c.   decrease rapidly and then slowly over the life of the asset.

d.   vary from year to year in relation to changes in output.

 

____    2.    Perry Corporation acquired land, buildings, and equipment from a bankrupt company at a lump-sum price of $550,000. At the time of acquisition Perry paid $50,000 to have the assets appraised. The appraisal disclosed the following values:

      Land                                        $320,000

      Buildings                                    256,000

      Equipment                                   64,000

What cost should be assigned to the land, buildings, and equipment, respectively?

a.   $400,000, $320,000, and $80,000.

b.   $275,000, $220,000, and $55,000.

c.   $300,000, $240,000, and $60,000.

d.   $200,000, $200,000, and $200,000.

 

____    3.    In accordance with GAAP, the maximum period over which a patent can be amortized is

a.   20 years.

b.   28 years.

c.   40 years.

d.   50 years.

 

____    4.    Purchased goodwill represents

a.   excess of price paid over fair value of net assets obtained in a combination.

b.   excess of price paid over the book value of the net assets obtained in a combination.

c.   the difference in the aggregate amount of the market prices of the stock of the combining companies.

d.   a tangible asset.

 

 

Use the following data to answer questions 5 through 9:

 

Davis Company purchased a new piece of equipment on July 1, 2012 at a cost of $1,080,000. The equipment has an estimated useful life of 5 years and an estimated salvage value of $90,000. The current year end is 12/31/13. Davis records depreciation to the nearest month.

 

____    5.    What is straight-line depreciation for 2013?

a.   $99,000.

b.   $108,000.

c.   $198,000.

d.   $216,000.

 

____    6.    What is sum-of-the-years'-digits depreciation for 2013?

a.   $263,999.

b.   $947,000.

c.   $324,000.

d.   $330,000.

 

____    7.    What is double-declining-balance depreciation for 2013?

a.   $2,59,200.

b.   $345,600.

c.   $396,000.

d.   $432,000.

 

____    8.    If Davis expensed the total cost of the equipment at 7/1/12, what was the effect on 2012 and 2013 income before taxes, assuming Davis uses straight-line depreciation?

a.   $882,000 understated and $198,000 overstated.

b.   $972,000 understated and $108,000 overstated.

c.   $981,000 understated and $198,000 overstated.

d.   $1,080,000 understated and $108,000 overstated.

 

____    9.    If, at the end of 2014, Davis Company decides the equipment still has five more years of life beyond 12/31/14, with a salvage value of $90,000, what is straight-line depreciation for 2014? (Assume straight-line used in all years.)

a.   $108,000.

b.   $115,500.

c.   $130,500.

d.   $198,000.

 

 

 

Use the following data for questions 10 through 17. Each question is independent of the other questions.

 

Sawyer Corporation has a machine (Machine A) that it acquired on 1/1/12 for $360,000. On 12/31/12 such machines have a selling price and fair market value of $414,000. When used in production, such machines have an estimated useful life of 10 years with no salvage value. Use the straight-line method.

 

Brown Corporation has a machine (Machine B) that it acquired on 1/1/12 for $486,000. On 12/31/12 such machines have a selling price and fair market value of $360,000. When used in production, such machines have an estimated useful life of 10 years with no salvage value. Use the straight-line method.

 

On 12/31/12 Brown gave Machine B plus $54,000 cash to Sawyer in return for
Machine A.

 

____ 10.    Assume that both Sawyer and Brown are new machine dealers and that the machines are still new. Also assume that the exchange lacks commercial substance. At what amount will Machine A be recorded on Brown’s books?

a.   $486,000.

b.   $414,000.

c.   $540,000.

d.   $360,000.

 

____ 11.    Given the assumptions in 10 above, at what amount will Machine B be recorded on Sawyer's books?

a.   $313,043.

b.   $486,000.

c.   $360,000.

d.   $421,044.

 

____ 12.    Assume that instead of dealers, both Sawyer and Brown are machine manufacturers and use the machines in production. Assume the exchange lacks commercial substance. At what amount will Brown record Machine A?

a.   $360,000.

b.   $414,000.

c.   $486,000.

d.   $540,000.

 

____ 13.    Given the assumption in 12 above, at what amount will Sawyer record Machine B?

a.   $371,739.

b.   $270,000.

c.   $335,736.

d.   $281,739.

 

 

 

____ 14.    Given the assumption in 12 above except that the fair values of Machines A and B are $504,000 and $450,000, respectively, at what amount will Brown record Machine A?

a.   $437,400.

b.   $504,000.

c.   $450,000.

d.   $491,400.

 

____ 15.    Return to the original problem. Assume that Sawyer is a dealer selling new machines and that Brown is a manufacturer. Assume that the exchange has commercial substance. For this transaction, at what amount will Sawyer record the truck?

a.   $360,000.

b.   $491,400.

c.   $414,000.

d.         $437,400.

Available Answer
$ 19.00

[Solved] COMPREHENSIVE EXAMINATION C

  • This solution is not purchased yet.
  • Submitted On 02 Sep, 2020 05:12:07
Answer posted by
Online Tutor Profile
solution
COMPREHENSIVE EXAMINATION C 1. When the sum-of-the-years'-digits method is used, depreciation expense for a given asset will a. decline by a constant amount each year. b. be the same each year. c. decrease rapidly and then slowly over the life of the asset. d. vary from year to year in relation to changes in output. 2. Perry Corp...
Buy now to view the complete solution
Other Similar Questions
User Profile
ultra...

HIUS 221 reading comprehension assessment 3 solutions answers key

Liberty University HIUS 221 reading comprehension assessment 3 complete solutions correct answers key Question 1 Read the following passage, then answer the questions below. It is with reluctance that I make the demand for...

User Profile
dinesh

comprehension research exam phd in business specialization in criminal justice

Comprehensive Doctoral Review Examination Presented in Partial Fulfillment of the Requirements for the Degree Doctor of Business Administration (or Philosophy) By “YOUR NAME” Healthcare Administrat...
User Image
Headm...

ATI COMPREHENSIVE Predictor Exam

1. A nurse is caring for a client who has bipolar disorder and is experiencing acute mania. The nurse obtained a verbal prescription for restraints. Which of the following should the actions the nurse take? A. Request a rene...
User Image
COURS...

ATI COMPREHENSIVE Predictor Exam

1. A nurse is caring for a client who has bipolar disorder and is experiencing acute mania. The nurse obtained a verbal prescription for restraints. Which of the following should the actions the nurse take? A. Request a rene...
User Image
Testg...

Evidence Based Practice|NR 449 Week 2 Comprehensive Exam 150 Questions and Answers with Rationale

Evidence Based Practice|NR 449 Week 2 Comprehensive Examination 150 Questions and Answers with Rationale Question: Nursing research is significant to the profession of nursing because it promotes what? Question: Which aspec...

The benefits of buying study notes from CourseMerit

homeworkhelptime
Assurance Of Timely Delivery
We value your patience, and to ensure you always receive your homework help within the promised time, our dedicated team of tutors begins their work as soon as the request arrives.
tutoring
Best Price In The Market
All the services that are available on our page cost only a nominal amount of money. In fact, the prices are lower than the industry standards. You can always expect value for money from us.
tutorsupport
Uninterrupted 24/7 Support
Our customer support wing remains online 24x7 to provide you seamless assistance. Also, when you post a query or a request here, you can expect an immediate response from our side.
closebutton

$ 629.35