A plant asset with a cash price of $405,000 and zero residualvalue was acquired on January 1, 2002 and $315,000 was spent toprepare it for operation. After it was placed into use, $20,000 wasspent to maintain the machine in 2002 and $25,000 in 2003.Units-of-production depreciation is used and it is estimated theasset will produce 800,000 units over its useful life. During 2002,90,000 units were produced. In 2003, 110,000 units wereproduced.
A. How much accumulated depreciation is reported as of December31, 2003?
B. Assuming your previous answer in A. is correct, what is theNet Book Value of the plant asset reported on the Dec. 31, 2003balance sheet?
A plant asset with a cash price of $405,000 and zero residualvalue was acquired on January 1, 2002 and $315,000 was spent toprepare it for operation. After it was placed into use, $20,000 wasspent to maintain the machine in 2002 and $25,000 in 2003.Units-of-production depreciation is used and it is estimated theasset will produce 800,000 units over its useful life. During 2002,90,000 units were produced. In 2003, 110,000 units wereproduced.
A. How much accumulated depreciation is reported as of December31, 2003?
B. Assuming your previous answer in A. is correct, what is theNet Book Value of the plant asset reported on the Dec. 31, 2003balance sheet?
Related questions
Property and equipment is reported at its:
| A. | historical cost. | |
| B. | market value. | |
| C. | book value. | |
| D. | fair value. | |
| E. | depreciation cost. |
Uganda Corporation estimates the life of its building to be 30 years. It originally cost $300,000 and was given a residual value of $30,000. Depreciation expense per year should be:
| A. | $100,000. | |
| B. | $10,000. | |
| C. | $300,000. | |
| D. | $9,000. | |
| E. | $90,000. |
QUESTION 3
Western Corporation purchased a machine for $20,000 with no residual value and a life of 4 years. What is the book value of the machine at the end of Year 4?
| A. | $5,000 | |
| B. | $16,000 | |
| C. | $4,000 | |
| D. | $0 | |
| E. | $20,000 |
QUESTION 4
The difference between the cost of an asset and its salvage value is its:
| A. | historical cost. | |
| B. | book value. | |
| C. | fair value. | |
| D. | depreciable base. | |
| E. | depreciation expense. |
QUESTION 5
An asset costing $50,000 with accumulated depreciation of $20,000 is sold for $25,000. What is the resulting gain or loss?
| $5,000 gain | ||
| $5,000 loss | ||
| Cannot determine since salvage value is not provided in the question. |
QUESTION 6
Which of the following is an example of an accelerated depreciation method?
| A. | The units-of-production method | |
| B. | The half-year convention method | |
| C. | The fixed assets turnover method | |
| D. | The double-declining balance method | |
| E. | The straight-line method |
QUESTION 7
Mannow Company uses the units-of-production depreciation method. Mannow purchased a machine for $80,000 with no salvage value. Mannow believes the machine will produce 400,000 units. In the first year, 90,000 units are produced. In the second year, 70,000 units are produced. What is the balance in accumulated depreciation at the end of year two?
| A. | $14,000 | |
| B. | $32,000 | |
| C. | $10,000 | |
| D. | $18,000 | |
| E. | $16,000 |
