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Intermediate Accounting
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BUS 475 EXAM 1 LATEST ACTUAL EXAM
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Intermediate Accounting
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Intermediate Accounting
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TEST BANK and SOLUTION MANUAL for IntermediateAccounting, 3rd Edition by Gordon, Raedy & Sannella
Ferguson Company purchased a depreciable asset for $120,000. The estimated
salvage value is $10,000, and the estimated useful life is 10 years. The straight-line
method will be used for depreciation. What is the depreciation base of this asset?
a. $11,000
b. $12,000
c. $110,000
d. $120,000 - ANSWER: c. $110,000
Hamilton Company purchased a depreciable asset for $240,000. The estimated
salvage value is $20,000, and the estimated useful life is 10 years. The straight-line
method will be used for depreciation. What is the depreciation base of this asset?
a. $22,000
b. $24,000
c. $220,000
d. $240,000 - ANSWER: c. $220,000
Solar Products purchased a machine for $39,000 on July 1, 2012. The company
intends to depreciate it over 4 years using the double-declining balance method.
Salvage value is $3,000. Depreciation for 2012 is
a. $19,500
b. $9,750
c. $14,625
d. $9,000 - ANSWER: b. $9,750
Solar Products purchased a machine for $39,000 on July 1, 2012. The company
intends to depreciate it over 4 years using the double-declining balance method.
Salvage value is $3,000. Depreciation for 2013 is
a. $19,500
b. $9,750
c. $14,625
d. $9,000 - ANSWER: c. $14,625
Gardner Corporation purchased a truck at the beginning of 2012 for $90,000. The
truck is estimated to have a salvage value of $3,600 and a useful life of 120,000
miles. It was driven 18,000 miles in 2012 and 32,000 miles in 2013. What is the
depreciation expense for 2012?
a. $13,500
b. $12,960
, c. $21,600
d. $36,000 - ANSWER: b. $12,960
Gardner Corporation purchased a truck at the beginning of 2012 for $90,000. The
truck is estimated to have a salvage value of $3,600 and a useful life of 120,000
miles. It was driven 18,000 miles in 2012 and 32,000 miles in 2013. What is the
depreciation expense for 2013?
a. $24,000
b. $36,000
c. $23,040
d. $38,400 - ANSWER: c. $23,040
Kinder Company purchased a depreciable asset for $280,000. The estimated salvage
value is $14,000, and the estimated useful life is 10,000 hours. Kinder used the asset
for 1,100 hours in the current year. The activity method will be used for
depreciation. What is the depreciation expense on this asset?
a. $26,600
b. $29,260
c. $30,800
d. $266,000 - ANSWER: b. $29,260
Jamar Company purchased a depreciable asset for $225,000. The estimated salvage
value is $15,000, and the estimated useful life is 8 years. The double-declining
balance method will be used for depreciation. What is the depreciation expense for
the second year on this asset?
a. $26,250
b. $39,375
c. $42,188
d. $56,250 - ANSWER: c. $42,188
Engels Company purchased a depreciable asset for $800,000. The estimated salvage
value is $40,000, and the estimated useful life is 10,000 hours. Engels used the asset
for 1,100 hours in the current year. The activity method will be used for
depreciation. What is the depreciation expense on this asset?
a. $76,000
b. $83,600
c. $88,000
d. $760,000 - ANSWER: b. $83,600
Hart Company purchased a depreciable asset for $450,000. The estimated salvage
value is $30,000, and the estimated useful life is 8 years. The double-declining
balance method will be used for depreciation. What is the depreciation expense for
the second year on this asset?
a. $52,500
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