ACCT 220 Principles of Accounting I Quiz
3 ( UMUC )
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ACCT 220 Principles of Accounting I Quiz 3 (
UMUC )
Multiple Choice (7 points each)
1. On January 1, 20X1, Blake Company purchased a
patent for $68,000. The patent has a remaining legal life of nine
years and an expected service life of eight years. The amortization
expense (to the nearest dollar) properly recognized for 20X1 is:$0.
B. $3,400.
C. $7,556.
D. $8,500.
E. None of these.
B. $3,400.
C. $7,556.
D. $8,500.
E. None of these.
2. Which of the following transactions would
cause a change in total stockholders’ equity?
1. A stock dividend.
2. Paying a previously declared cash dividend.
3. Reissuing treasury stock at its cost.
4. A stock split.
5. None of these.
3. Normally, the payment of a previously declared
dividend will result in:
1. a decrease in liabilities.
2. a decrease in working capital.
3. a decrease in stockholders’ equity.
4. All of the above.
5. None of these.
Problem #1 (15 points)
Hogan Company sold equipment for $6,000 which cost $8,000 and
had accumulated depreciation of $5,500. What is the proper journal entry to
record this transaction?
Problem #2 (15 points)
Hector Company sold equipment, for $1,000 which cost $8,000 and
had accumulated depreciation of $5,500. What is the proper journal entry to
reflect this transaction?
Problem #3 (15 points)
Gaines originally issued 15,000 shares of $10 par value common
stock at $15 per share. During the current year, 1,000 of these shares
were reacquired for $20 each. What is the proper journal entry to
record the reacquisition?
Problem #4 (34 points)
On January 1, 2015 Jett Inc. purchased equipment for $154,000 in
cash. The equipment is expected to have an operating life of 4 years. The
estimated salvage value is $25,000.
Required:
1. Using the
straight-line method of depreciation:
2016.
Determine the annual
depreciation expense for 2015 and 2016.
2017.
Determine the
accumulated depreciation at the end of each of the following years: 2015 and
2016.
2018.
Show how the asset and
related accumulated depreciation would appear on the balance sheet at December
31, 2016.
2019.
Prepare the journal
entries to record the asset’s acquisition and annual depreciation expense for
2015 and 2016.
2. Using the
double-declining balance method of depreciation:
2016.
Determine the annual
depreciation expense for 2015 and 2016.
2017.
Determine the
accumulated depreciation at the end of each of the following years: 2015 and
2016.
2018.
Show how the asset and
related accumulated depreciation would appear on the balance sheet at December
31, 2016.
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