Question

16. A machine with a cost of $80,000 has an estimated residual value of $5,000 and an estimated life of 5 years or 15.000 hours. It is to be depreciated by the units-of-production method. What is the amount of depreciation for the second full year, during which the machine was used 5,000 hours? a $5.000 b. $25,000 c. $15,000 d $26,667 17. Computer equipment was acquired at the beginning of the year at a cost of $65,000 that has an estimated residual value of $3,000 and an estimated useful life of 5 years. Determine the 2nd year's depreciation using straight-line depreciation. a. $26,000 b. $24,800 c. $12,400 d. $13,000 8. The Weber Company purchased a mining site for $500,000 on July 1, 2009. The company expects to mine ore for the next 10 years and anticipates that a total of 100,000 tons will be recovered. The estimated residual value of the property is $80,000. During 2009 the company extracted 4,000 tons of ore. The depletion expense for 2009 is a. $10,500 b. $43,200 c. $16,800 d. $20,000 19. Xtra Company purchased goodwill from Argus for $144,000. Argus had developed the goodwill over 6 years. How much would Xtra amortize the goodwill for its first year? a $8,640 b. $24,000 C. Goodwill is not amortized. d. Not enough information 20. Current liabilities are a. due, but not receivable for more than one year b. due, but not payable for more than one year C. due and receivable within one year d. due and payable within one year 21. On June 8, Alton Co. issued an $80,000, 6%, 120-day note payable to Seller Co. What is the due date of the note? a. October 8 b. October 7 C. October 6 d. October 5

Answer 1

Answer is given below

16 Answer is b) $25,000 Cost Total hours Residual value $5,000 Rate Per hour $5.00 $80,000 - 15,000 Depreciation for 2nd year $25,000 17 Answer is c) $12,400.00 Residual - Cost Total Life value Depreciation per year $12,400 $65,000 - $3,000 5 18 Answer is c) $16,800 Rate Cost Total tons Residual value $80,000 Per ton $4.20 $500,000 - 100,000 Depletion for 2009 $16,800 19 Answer is b) $24,000 Cost Amortization Total life Years 6 $144,000 $24,000 (Cost/Life of goodwill) 20 Answer is d) Current liabilities are the liabilities which are due within one year If it is due more than a year it will be long term liability 21 Answer is c) October 6 the note is due June July August September October 22 days 31 days 31 days 30 days 6th day