Exam

Question 1

How much did Apple buy from suppliers in 2020?

Answer 1

$169,559 B

Question 2

Calculate gross profit rate of Apple in 2020:

Answer 2

38%

Question 3

Suppose in its income statement for the year ended in June 30th, 2017, The Clorox Compny reported the following condensed data (dollars in millions):
Sal & wages expense: $460 R&D: $114
Depreciation exp: $90 Income tax exp: $276
Sales Revenue: $5,730 Loss on dis of Plant ast: $46
Interest exp: $161 COGS: $3,104
Advertising Exp: $499 Rent exp: $105
Sales ret. & allow: $280 Utilities Exp: $60

Calculate gross profit

Answer 3

A) $2,346,000,000

Question 4

Suppose in its income statement for the year ended in June 30th, 2017, The Clorox Compny reported the following condensed data (dollars in millions):
Sal & wages expense: $460 R&D: $114
Depreciation exp: $90 Income tax exp: $276
Sales Revenue: $5,730 Loss on dis of Plant ast: $46
Interest exp: $161 COGS: $3,104
Advertising Exp: $499 Rent exp: $105
Sales ret. & allow: $280 Utilities Exp: $60

Calculate income from operation

Answer 4

D) $1,018,000,000

Question 5

Suppose in its income statement for the year ended in June 30th, 2017, The Clorox Compny reported the following condensed data (dollars in millions):
Sal & wages expense: $460 R&D: $114
Depreciation exp: $90 Income tax exp: $276
Sales Revenue: $5,730 Loss on dis of Plant ast: $46
Interest exp: $161 COGS: $3,104
Advertising Exp: $499 Rent exp: $105
Sales ret. & allow: $280 Utilities Exp: $60

Calculate profit margin

Answer 5

B) 9.8%

Question 6

Gross profit equals the difference between:

a) net income and operating expenses
b) net sales and COGS
c) net sales and operating expenses
d) net sales and COGS plus operating expenses

Answer 6

b) net sales and COGS

Question 7

Which of the following is a true statement about inventory systems?

a) periodic inventory systems require more detailed inventory records
b) perpetual inventory systems require more detailed inventory records
c) a periodic system requires cost of goods sold be determined after each sale
d) a perpetual system determines cost of goods sold only at the end of the accounting period

Answer 7

b) perpetual inventory systems require more detailed inventory records

Question 8

Which of the following accounts is classified as a contra revenue account?

a) sales revenue
b) COGS
c) Sales returns & allowances
d) purchase discounts

Answer 8

c) Sales returns & allowances

Question 9

When sales of merchandise are made for cash, the transaction may be recorded by the following entry:

a) Debit sales revenue,	credit cash
b) Debit cash,				credit sales revenue
c) Debit sales revenue,	credit cash discounts
d) Debit sales revenue,	credit sales returns and allowances

Answer 9

b) Debit cash, credit sales revenue

Question 10

The respective normal account balance of sales, sales returns & allowances, and sales discounts are:

a) credit, credit, credit
b) debit, credit, debit
c) credit, debit, debit
d) credit, debit, credit

Answer 10

c) credit, debit, debit

Question 11

Piper company sells merchandise on account for $1,800 to Morton company with credit terms of 2/10, n/30. Morton company returns $600 of merchandise that was damaged, along with a check to settle the account within the discount period. What entry does Piper Company make upon receipt of the check?

Answer 11

c) Cash 1,176
sales returns & allowances 624
sales discounts 24
accounts receivable $1,800

Question 12

Financial information is presented below:
	Operating expenses		$40,000
	Sales revenue			$200,000	
	Cost of goods sold		$150,000
The gross profit rate would be:
	a) .75
	b) .20
	c) .05
	d) .25

Answer 12

d) .25 200,000-15000 = 50,000/200,000 = 25%

Question 13

Financial information is presented below:
	Operating expenses		$40,000
	Sales revenue			$200,000	
	Cost of goods sold		$150,000
The profit margin would be:
	a) .75
	b) .05
	c) .25
	d) .95

Answer 13

b) .05 200,000 - 150,000 - 40,000 = 10,000/200,000 = 5%

Question 14

Financial information is presented below:
	operating expenses			$28,000
	sales returns & allowances	$7,000
	sales discounts				$3,000
	sales revenue				$150,000
	cost of goods sold 			$98,000
The gross profit would be:
	a) .35
	b) .30
	c) .70
	d) .28

Answer 14

B) .30 (150,000 - 10,000 - 98,000) / (150,000 - 10,000)

Question 15

Financial information is presented below:
	operating expenses			$28,000
	sales returns & allowances	$7,000
	sales discounts				$3,000
	sales revenue				$150,000
	cost of goods sold 			$98,000
The profit margin would be:
	a) .28
	b) .09
	c) .30
	d) .10

Answer 15

C) .30 (150,000 - 10,000 - 98,000) / (150,000 - 10,000) = 30%

Question 16

For a jewelry retailer, which is an example of other revenues and GAINS?

a) repair revenue
b) unearned revenue
c) GAIN on sale of display cases
d) discount received for paying for merchandise inventory within the discount period

Answer 16

c) GAIN on sale of display cases

Question 17

Haverty Industries increased its gross profit rate from 18.4% in 2016 to 23.7% in 2017. Which of the following would be a possible explanation for this changes?

a) Haverty’s global sourcing efforts at the beginning of 2017 resulted in a lower cost of merchandise sold.
b) Haverty’s new profit lines with lower margins in 2017 became a larger component of their salaries.
c) Haverty increased its product markdowns in 2017
d) Haverty’s average margin between the selling price and the inventory cost decreased over this two-year period.

Answer 17

a) Haverty’s global sourcing efforts at the beginning of 2017 resulted in a lower cost of merchandise sold.

	“lower cost, higher profit”

Question 18

Jeters Company reports the following for the month of June:

Date	explanation		units	unit cost	total
June 1 	Inventory		120		$5			$600
	12	Purchase		370		$6			$2,220
	23	Purchase		200		$7			$1,400
*ending inventory is 230 units

**compute the cost of goods sold under FIFO***
A) $1,580
B) $2,640
C) $1,260
D) $2,960

Answer 18

B) $2,640 120x5 + 340x6 = 2,640

Question 19

Jeters Company reports the following for the month of June:

Date	explanation		units	unit cost	total
June 1 	Inventory		120		$5			$600
	12	Purchase		370		$6			$2,220
	23	Purchase		200		$7			$1,400
*ending inventory is 230 units

**compute the cost of goods sold under LIFO***
A) $1,580
B) $2,640
C) $1,260
D) $2,960

Answer 19

D) $2,960 260x6 + 200x7 = 2,960. (260 = 370-110)

Question 20

Jeters Company reports the following for the month of June:

Date	explanation		units	unit cost	total
June 1 	Inventory		120		$5			$600
	12	Purchase		370		$6			$2,220
	23	Purchase		200		$7			$1,400
*ending inventory is 230 units

**compute the cost of the ending inventory under FIFO***
A) $1,580
B) $2,640
C) $1,260
D) $2,960

Answer 20

A) $1,580 30x6 + 200x7 = 1,580

Question 21

Jeters Company reports the following for the month of June:

Date	explanation		units	unit cost	total
June 1 	Inventory		120		$5			$600
	12	Purchase		370		$6			$2,220
	23	Purchase		200		$7			$1,400
*ending inventory is 230 units

**compute the cost of the ending inventory under LIFO***
A) $1,580
B) $2,640
C) $1,260
D) $2,960

Answer 21

C) $1,260 120x5 + 110x6 = 1260

Question 22

Digital Camera Shop Inc. uses the lower-of-cost-or-market basis for its inventory. The following data are available at December 31:

Cameras			units	cost/unit	mkt/unit
Minolta				5		$170		$158
Canon 				7		$145		$152
Light meters								
Vivitar				12		$125		$114
Kodak				10		$120		$135

• *What amount should be reported on DCS’s financial statements, assuming the lower-of-cost-or-market rule is applied?
  a) $4,373
  b) $4,573
  c) $4,773
  d) $4,973

Answer 22

a) $4,373

Question 23

Gas on Corporation sells coffee beans, which are sensitive to price fluctuations. The following inventory information is available for this product at December 31, 2017:

Coffee bean units unit cost market
Arabica 13,000 bags $5.60 $5.55
Robusta 5,000 bags $3.40 $3.50

**Calculate Tascon’s inventory by applying the lower-of-cost-or-market basis 
A) $85,150
B) $87,150
C) $89,350
D) $89,150

Answer 23

D) $89,150 (13,000x5.55) + (5,000x3.4) = $89,150

Question 24

Alpha First Company just began business and made the following four inventory purchases in June:
	June 1		150 units	$1,040
	June 10 		200 units	$1,560
	June 15	 	200 units	$1,680
	June 28		150 units	$1,320
							= $5,600
A physical count of merchandise inventory on June 30th reveals that there are 210 units on hand. Using the LIFO inventory method, the value of the ending inventory on June 30th is:
A) $1,456
B) $1,508
C) $1,848
D) $1,824

Answer 24

B) $1,508

Question 25

Baker Bakery Company just began business and made the following four inventory purchases in June:
	June 1		150 units		$1,040
	June 10		200 units		$1,560
	June 15		200 units		$1,680
	June 28		150 units		$1,320	
								=$5,600
A physical count of merchandise inventory on June 30 reveals that there are 210 units on hand. Using the FIFO inventory method, the amount allocated to ending inventory for June is:
	a) $1,456
	b) $1,508
	c) $1,824
	d) $1,848

Answer 25

c) $1,824

Question 26

Manufactured inventory that has begun the production process but is not yet completed is:

a) work in progress
b) raw materials 
c) merchandise inventory
d) finished goods

Answer 26

a) work in progress

Question 27

Goods held on consignment are:

a) never owned by the co-signed
b) included in the cosignee’s ending inventory 
c) kept for sale on the premises of the co-signer
d) included as part of no one’s ending inventory

Answer 27

a) never owned by the co-signed

Question 28

Olympus Climbers Company has the following inventory data:
July 1 Beginning inventory 30 units at $19 = $570
July 7 purchases 105 units at $20 = $2,100
July 22 purchases 15 units at $22 = $330
=$3,000
A physical count of the merchandise inventory on July 30 reveals that there are 48 units on hand, Using the FIFO method, the amount allocated to cost of goods sold for July is:
a) $930
b) $990
c) $2,010
d) $2,070

Answer 28

c) $2,010 $570+$1,440 = $2,010

Question 29

Quiet Phones Company has the following inventory data:
July 1 beg. Inventory 30 units at $19 = $570
July 7 purchases 105 units at $20 = $2,100
July 22 purchases 15 units at $22 = $330
= $3,000
A physical count of merchandise inventory on July 30 reveals that there are 48 units on hand. Using the LIFO inventory method, the amount allocated to cost of goods sold for July is:
a) $930
b) $990
c) $2,010
d) $2,070

Answer 29

d) $2,070 $330 + 1,740 = 2,070

Question 30

Which of the following is not a common cost flow assumption used in costing inventory?

a) First-in, first-out
b) Middle-in, first-out
c) Last-in, first-out
d) average cost

Answer 30

b) Middle-in, first-out

Question 31

In a period of rising prices, which of the following inventory methods generally results in the lowest net income figure?

a) average cost method
b) LIFO method
c) FIFO method
d) Need more information to answer

Answer 31

b) LIFO method

Question 32

Nelson Corporation sells three different products. the following information is available on December 31:
Inv. Item units cost per unit market value per unit
X 300 $4.00 $3.50
Y 600 $2.00 $1.50
Z 1,500 $3.00 $4.00
When applying the lower cost or market rule to each item, what will Nelson’s total ending inventory balance be?
a) $6,900
b) $6,450
c) $7,950
d) $6,600

Answer 32

b) $6,450. (300x3.50)+(600x1.50)+(1,500x3.00) = $6,450

Question 33

The following information was available for Bowyer Company at December 31, 2017: beginning inventory $90,000; ending inventory $70,000; cost of goods sold $800,000; and sales $1,100,000. Bowyer’s inventory turnover in 2017 was:

a) 13.8 times
b) 10.0 times
c) 11.4 times
d) 8.9 times

Answer 33

b) 10.0 times *inventory turnover = COGS/avg. inv or 800,000/80,000

Question 34

The factor which determines whether or not goods should be included in a physical count of ending inventory is:

a) physical possession
b) legal title (ownership)
c) managements judgement
d) whether or not the purchase price has been paid

Answer 34

b) legal title (ownership)

Question 35

The receivable that is usually evidenced by a formal instrument of credit is a(n):

a) trade receivable
b) note receivable 
c) accounts receivable
d) income tax receivable

Answer 35

b) note receivable

Question 36

Receivables are:

a) one of the most liquid assists and thus are always considered current assets
b) claims that are expected to be collected in cash
c) shown on the income statement at cash realized value
d) always the result of revenue recognition

Answer 36

b) claims that are expected to be collected in cash

Question 37

Which one of the following is not an accounting problem (issue) associated with accounts receivable?

a) depreciating accounts receivable
b) recognizing accounts receivable
c) valuing accounts receivable
d) accelerating cash receipts from AR

Answer 37

a) depreciating accounts receivable.

Question 38

Accounts receivable are valued and reported on the balance sheet: a) in the investments section

b) at gross amounts less sales returns & allowances
c) at cash realizable value
d) only if they are not past due

Answer 38

c) at cash realizable value

Question 39

The allowance for doubtful accounts is necessary because:

a) when recording uncollectible accounts expense, it is not possible to know which specific accounts will not pay
b) uncollectible accounts that are written off must be accumulated in a separate account
c) a liability results when a credit sale is made
d) management needs to accumulate all the credit losses over the years

Answer 39

a) when recording uncollectible accounts expense, it is not possible to know which specific accounts will not pay

Question 40

Under the allowance method, Bad Debt Expense is recorded:

a) when the individual account is written off
b) when the loss amount is known
c) for an amount that the company estimates it will not collect
d) several times during the accounting period

Answer 40

c) for an amount that the company estimates it will not collect

Question 41

Under the allowance method, writing off an uncollectible account:

a) affects only balance sheet accounts
b) affects both balance sheet and income statement accounts
c) affects only income statement accounts
d) is not acceptable practice

Answer 41

a) affects only balance sheet accounts

Question 42

When the allowance method is used to account for uncollectible accounts, bad Debts Expense is debited when: a) a sale is made

b) an account becomes bad and is written off
c) management estimates the amount of uncollectible
d) a customer’s account becomes past due

Answer 42

c) management estimates the amount of uncollectible

Question 43

When an account becomes uncollectible and must be written off:

b) AR should be credited and Allowance for Doubtful Accounts should be debited
c) Bad Debt Expense should be credited
d) Sales Revenue should be debited

Answer 43

b) AR should be credited and Allowance for Doubtful Accounts should be debited

Question 44

Bad Debt Expense is considered:

a) an avoidable cost in doing business on a credit basis
b) an internal control weakness
c) a necessary risk of doing business on a credit basis
d) avoidable unless there is a recession

Answer 44

c) a necessary risk of doing business on a credit basis

Question 45

Nichols Company uses the percentage of receivables method for recording bad debts expense. The accounts receivable balance is $250,000 and credit sales are $1,000,000. Management estimates that 4% of accounts receivable will be uncollectible. What adjusting entry will Nichols Company make if the Allowance for Doubtful Accounts has a credit balance of $2,500 before adjustment?
a)bad debt expense 10,000
allowance for doubtful accounts 10,000
b) bad debt expense 7,500
allowance for doubtful accounts 7,500
c) bad debt expense 7,500
accounts receivable 7,500
d) bad debt expense 10,000
accounts receivable 10,000

Answer 45

b) bad debt expense 7,500

allowance for doubtful accounts 7,500 250,000x4% = 10,000 - 2,500 = $7,500

Question 46

In 2017 the Golic Co. had net credit sales of $900,000. On January 1, 2017, the Allowance for Doubtful Accounts had a credit balance of $22,500. During 2017, $36,000 of uncollectible accounts receivable were written off. Past experience indicates that the allowance ghouls be 10% of the balance in receivables (percentage-of-receivables basis). If the accounts receivable balance at December 31 was $240,000, what is the required adjustment to the Allowance for Doubtful Accounts at December 31, 2017?

a) $24,000
b) $37,500
c) $46,500
d) $36,000

Answer 46

b) $37,500

Question 47

Smithson Corporation’s unadjusted trial balance includes the following balances (assume normal balances): * Accounts receivable $1,119,000
* Allowances for Doubtful Accounts $21,300
Bad debts are estimated to be 6% of outstanding receivables. What amount of bad debt expense will the company record?
a) $67,140
b) $45,840
c) $44,562
d) $68,418

Answer 47

b) $45,840. 1,119,000x6% = 67,140 - 21,300 = 45,840

Question 48

The interest on a $20,000, 6%, 60 day note receivable is:

a) $1,200
b) $200
c) $400
d) $600

Answer 48

b) $200. (Bases on ANNUAL)

Question 49

The interest on a $15,000, 6%, 90-day note receivable is:

a) $900
b) $450
c) $225
d) $675

Answer 49

c) $225

Question 50

As an incentive for customers to pay their accounts promptly, a business may offer its customers:

a) a sales discount
b) free delivery
c) a sales allowance
d) a sales return

Answer 50

Hmmmm?

Question 51

Mary Richardo has performed $500 of CPA services for a client but has not billed the client as of the end of the accounting period. What dusting journal entry must Mary make?

a) Debit cash and credit unearned service revenue
b) Debit accounts receivable and credit unearned service revenue
c) Debit accounts receivable and credit service revenue
d) Debit unearned service revenue and credit service revenue

Answer 51

c) Debit accounts receivable and credit service revenue. (She already provided service)

Question 52

A company purchased land for $350,000 cash. Real estate brokers’ commission was $25,000 and $35,000 was spent for demolishing an old building on the land before construction of a new building could start. Under he historical cost principle, the cost of land would be recorded at:

a) $385,000
b) $350,000
c) $375,000
d) $410,000

Answer 52

d) $410,000 350,000+25,0000+35,0000 = 410,000

Question 53

Which of the following is not properly classified as Plant, property, and equipment?

a) building used as a factory
b) land used in ordinary business operations
c) a truck held for resale by an automobile dealership
d) Land improvement, such as parking lots and fences

Answer 53

c) a truck held for resale by an automobile dealership

Question 54

A characteristic of a plant asset is that it is

a) intangible
b) used in operations of a business
c) held for sale in the ordinary course of the business
d) not currently used in the business but held for future use

Answer 54

b) used in operations of a business

Question 55

Which of the following would not be included in the Equiptment account? a) installation costs

b) freight costs
c) cost of trial runs
d) electricity used by the machine

Answer 55

d) electricity used by the machine

Question 56

White Clinic purchases land for $420,000 cash. The clinic assumes $4,500 in property taxes due on the land. The title and attorney fees totaled $3,000. The clinic had the land graded for $6,600. What amount does Whyte Clinic record as the cost for the land? a) $426,600

b) $420,000
c) $434,100
d) $427,500

Answer 56

c) $434,100. 420,000+3,000+6,600+4,500 = 434,100

Question 57

Carpino Company purchased equiptment and these costs were incurred:
	Cash price					$75,000
	Sales tax 					$3,500
	Insurance during transit		$750
	Installation and testing 		$1,500
								=$80,750
What amount should be recorded as the cost of the equipment?
	a) $75,000
	b) $78,500
	c) $79,250
	d) $80,750

Answer 57

d) $80,750

Question 58

The balance in the Accumulated Depreciation account represents the:

a) cash fund to be replace plant assets
b) amount to be deducted from the cost of the plant asset to arrive at its fair market value
c) amount charged to expense in the current period
d) amount charged to expense since the acquisition of the plant asset

Answer 58

d) amount charged to expense since the acquisition of the plant asset

Question 59

The cost of a long term asset is expensed:

a) when it is paid for
b) as the asset benefits the company
c) in the period in which it is acquired
d) in the period in which it is disposed

Answer 59

Hmmmm?

Question 60

The book value of an asset is equal to the:

a) asset’s fair value less its historical cost
b) blue book value relied on by secondary markets
c) replacement cost of the asset
d) asset’s cost less accumulated depreciation

Answer 60

d) asset’s cost less accumulated depreciation

Question 61

In computing depreciation, salvage value is:

a) the fair value of a plant asset on the date of acquisition 
b) subtracted from accumulated depreciation to determine the plant asset’s depreciable cost
c) an estimate of a plant asset’s value at the end of its useful life
d) ignored in all the depreciation methods

Answer 61

c) an estimate of a plant asset’s value at the end of its useful life

Question 62

All of the following statements are false regarding depreciation:

a) depreciation is an asset valuation process
b) depreciation does not apply to land improvements
c) recognizing depreciation results in the accumulation of cash for asset replacement
d) depreciation does not apply to land

Answer 62

Hmmmm???

Question 63

Equipment was purchased for $150,000. Freight charges amounted to $7,000 and there was a cost of $20,000 for building a foundation and installing the equipment. It is estimated that the equipment will have a $30,000 salvage value at the end of its 5-year useful life. Depreciation expense each year using the straight-line method will be:

a) $35,000
b) $29,400
c) $24,600
d) $24,000

Answer 63

b) $29,400. (150,000+7,000+20,000)-30,000/5 = 29,400

Question 64

Equipment with a cost of $300,000 has an estimated salvage value of $20,000 and an estimated life of 4 years or 10,000 hours. It is to be depreciated by the straight-line method. What is the amount of depreciation for the first full year, during which the equipment was used 2,700 hours?

a) $75,000
b) $70,000
c) $75,600
d) $72,500

Answer 64

b) $70,000. (300,000-20,000)/4

Question 65

A company purchased factory equipment on April 1, 2017, for $128,000. It is estimated that the equipment will have a $16,000 salvage value at the end of its 10-year useful life. Using the straight-line method of depreciation, the amount to be recorded as depreciation expense at December 31, 2017 is:

a) $12,800
b) $11,200
c) $8,400
d) $9,600

Answer 65

c) $8,400 (128,000-16,000)/120 x 9 (months)

Question 66

On October 1, 2017, Mann Company places a new asset into service. The cost of the asset is $120,000 with an estumated 5-year life and $30,000 salvage value at the end of its useful life. What is the deprecition expense for 2017 if Mann Company uses the straight-line method of depreciation?

a) $4,500
b) $24,000
c) $6,000
d) $12,000

Answer 66

a) $4,500. [(120,000-30,000)/60] x 3 months

Question 67

A change in the estimated useful life of equipment requires:

a) a retroactive change in the amount of periodic depreciation recognized in previous years
b) that no change be made in the periodic depreciation so that deprecation amounts are comparable over the life of the asset
c) that the amount of periodic depreciation be changed in the current year and in future years
d) that income for the current year be increases

Answer 67

c) that the amount of periodic depreciation be changed in the current year and in future years

Question 68

An expenditure for which of the following items would be considered a revenue expenditure?

a) plant asset
b) Ordinary repair
c) Addition
d) improvements

Answer 68

b) Ordinary repair. (everything else is PPE!!)

Question 69

Jack’s Copy Shop bought equipment for $240,000 on January 1, 2016. Jack estimated the useful life to be 3 years with no salvage value, and the straight-line method of depreciation will be used. On January 1, 2017, Jack decideds that the business will use the equipment for a total of 5 years. What is the revised depreciation expense for 2017?

a) $80,000
b) $32,000
c) $40,000
d) $60,000

Answer 69

b) $32,000 (400,000-80,000)/10 = 32,000

Question 70

An asset was purchased for $400,000. It had an estimated salvage value of $80,000 and an estimated useful llife 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) $48,000
b) $35,200
c) $24,000
d) $33,600

Answer 70

b) $35,200.

Question 71

Ron’s Quik Shop bought equipment for $140,000 on January 1, 2016. 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, 2017, Ron decides that the business will use the equipment for a total of 6 years. What is the revised depreciation expense for 2017?

a) $22,400
b) $11,200
c) $18,667
d) $28,000

Answer 71

a) $22,400. 140,000/5 = 28,000 –> (140,000-28,000)/5 = 22,400

Question 72

Which of the following is not true of ordinary repairs?

a) They primarily benefit the current accounting period
b) They can be referred to as revenue
c) They maintain the expected productive life of the asset
d) They increase the productive capacity of the asset

Answer 72

hmmmm???

Question 73

In 2017, Blanchard Corporation has plant equipment that originally cost $120,000 and has accumulate depreciation of $48,000. A new processing technique has rendered the equipment obsolete, so it is retired. Which of the following entries should Blanchard use to record the retirement of the equipment?
b) Accumulated depreciation (equipment) $48,000
Loss on Disposal of Plant assets. $72,000
equipment $120,000

Answer 73

b) Accumulated depreciation (equipment) $48,000
Loss on Disposal of Plant assets. $72,000
equipment $120,000

Question 74

A company sells a plant asset that originally cost $375,000 for $125,000 on December 31, 2017. The accumulated depreciation account had a balance of $150,000 after the current year’s depreciation of $37,500 had been recorded. The company should recognize a:

a) $250,000 loss on disposal
b) $100,000 gain on disposal
c) $100,000 loss on disposal
d) $62,500 loss on disposal

Answer 74

c) $100,000 loss on disposal. (375,000-275,000) = 100,0000

Question 75

On July 1, 2017, Dillman Kennels sells equipment for $110,000. The equipment originally cost $300,000, had an estimated 5-year life and an expected salvage value of $50,000. The accumulated depreciation account had a balance of $175,000 on January 1, 2017, using the straight-line method. the gain or loss on disposal is:

a) $15,000 gain
b) $10,000 loss
c) $15,000 loss
d) $10,000 gain

Answer 75

d) $10,000 gain

Question 76

Research and development costs:

a) are classified as intangible assets
b) must be expensed when incurred under generally accepted accounting principles
c) should be included in the cost of the patent they relate to
d) are capitalized and then amortized over a period not to exceed 20 years

Answer 76

b) must be EXPENSED when incurred under generally accepted accounting principles

Question 77

Which of the following is not an intangible asset that is reported on the balance sheet?

a) Goodwill
b) Trademarks
c) Employees
d) Copyrights

Answer 77

c) Employees

Question 78

Given the following account balances at year end, complete the total intangible assets on the balance sheet of Janssen Enterprises:
   cash                  $1,500,000
   AR                     $1,000,000
   Trademarks       $1,200,000
   Goodwill.            $2,500,000
   R&D costs          $2,000,000

Answer 78

hmmmm???

Question 79

Find accumulated depreciation for Apple in 2020:

a) $47b
b) $57b
c) $67b
d) $77b

Answer 79

c) $67b

Question 80

Find a total original price of PPE for Apple in 2020:

a) $84b
b) $94b
c) $104b
d) $114b

Answer 80

c) $104b pg 45?? (ppe?)