100% satisfaction guarantee Immediately available after payment Both online and in PDF No strings attached
logo-home
Previously searched by you
Previously searched by you
logo
ACG 2021 Exam 2 Study Questions and Correct Answers $8.99
Add to cart
Quickly navigate to
Preview
  2.  
  3. ACG 2021
  4.  
  5. ACG 2021

Exam (elaborations)

ACG 2021 Exam 2 Study Questions and Correct Answers
 0 purchase
  • Course
  • ACG 2021
  • Institution
  • ACG 2021

A company purchased equipment and incurred these costs: Cash price, $26,000 Sales taxes, $1,200 Insurance during transit, $400 Annual maintenance costs, $500 What amount should be recorded as the cost of the equipment? ($26,000 + $1,200 + $400 = $27,600) =$27,600 ***The $500 annual maintenance co...

[Show more]

Preview 2 out of 10  pages

Document information

  • August 11, 2024
  • 10
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

Subjects

  • acg 2021 exam 2 study questions and correct answer
  • a company purchased equipment and incurred these c
  • the 500 annual maintenance costs are expensed

Written for

  • ACG 2021
  • ACG 2021

Seller

avatar-seller
twishfrancis

Reviews received

Content preview

ACG 2021 Exam 2 Study Questions and
Correct Answers
A company purchased equipment and incurred these costs:
Cash price, $26,000
Sales taxes, $1,200
Insurance during transit, $400
Annual maintenance costs, $500
What amount should be recorded as the cost of the equipment? ✅($26,000 + $1,200 +
$400 = $27,600)


=$27,600

***The $500 annual maintenance costs are expensed as operating expenses as
incurred.

A company acquires land for $160,000 cash. Additional costs are as follows:
Removal of shed, $500
Filling and grading, $2,000
Salvage value of lumber of shed, $120
Broker commission, $6,000
Paving of parking lot, $15,500
Closing costs, $1,000
The company should record the acquisition cost of the land as ✅Purchase price,
160,000
Add: Removal of shed less salvages (i.e., 500 - 120), 380
Add: Filling and grading, 2,000
Add: Broker's commission, 6,000
Add: Closing costs, 1,000
Acquisition costs of land, 169,380


=$169,380

Which one of the following items is not a consideration when recording periodic
depreciation expense on plant assets? ✅To compute depreciation, one must know the
asset's cost, salvage value, estimated useful life, and which depreciation method is
being used.


= Price of replacing the plant asset.

, A company purchased equipment that has an invoice price of $18,000. It also paid
freight charges of $500 and installation costs of $2,500. The estimated salvage value
and useful life are $2,000 and four years, respectively. Under the straight-line method,
how much is annual depreciation expense? ✅Depreciation expense = ($21,000 -
$2,000)/4 = $4,750 per year.


=$4,750

A company uses straight-line depreciation. It purchased a truck for $40,000. The truck's
salvage value is $10,000. The truck's annual depreciation expense is $6,000. What is
the truck's useful life? ✅($30,000/$6,000 per year = 5 years).


=5 years

A company purchased a truck for $27,000. The company paid $1,200 to paint the
company's logo on the truck. The estimated salvage value and useful life are $1,200
and 5 years, respectively. How much is the accumulated depreciation under the
straight-line method after three years? ✅$27,000 + $1,200 = $28,200.

$28,200 - $1,200/5 years = $5,400

$5,400 x 3 = $16,200.

=$16,200

On August 1, a company purchased equipment for $16,000. The equipment's estimated
salvage value is $1,000. The machine will be depreciated using straight-line
depreciation and a five year life. If the company prepares annual financial statements on
December 31, the appropriate adjusting journal entry to make on December 31 of the
first year would be a ✅$1,250 debit to Depreciation Expense and a $1,250 credit to
Accumulated Depreciation.

Which statement is true about additions to plant assets? ✅They are capitalized.

A company purchased equipment for $50,000 on January 1 of its first year. The
equipment's original estimated useful life is 8 years and its estimated salvage value is
$10,000. The company uses the straight-line method of depreciation. On December 31
of its second year, before year-end adjusting entries have been recorded, the company
decides to shorten the estimated useful life by 3 years giving it a total life of 5 years.
The company did not change the salvage value and continues to use the straight-line
method. How much depreciation expense should be recorded for the second year?
✅Original depreciation per year = [($50,000 - $10,000)/8] x 1 = $5,000Revised
depreciation per year = [($50,000 - 5,000) - $10,000]/(5-1) = $8,750

The benefits of buying summaries with Stuvia:

Guaranteed quality through customer reviews

Guaranteed quality through customer reviews

Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.

Quick and easy check-out

Quick and easy check-out

You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.

Focus on what matters

Focus on what matters

Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!

Frequently asked questions

What do I get when I buy this document?

You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.

Satisfaction guarantee: how does it work?

Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.

Who am I buying these notes from?

Stuvia is a marketplace, so you are not buying this document from us, but from seller twishfrancis. Stuvia facilitates payment to the seller.

Will I be stuck with a subscription?

No, you only buy these notes for $8.99. You're not tied to anything after your purchase.

Can Stuvia be trusted?

4.6 stars on Google & Trustpilot (+1000 reviews)

64670 documents were sold in the last 30 days

Founded in 2010, the go-to place to buy study notes for 15 years now

Start selling
$8.99
  • (0)
Add to cart
Added