1. A gain is recognized on the disposal of plant assetswhen:
A) The sales price is greater than theresidual value but less than the book value.
C) The sales price is greater than the bookvalue and greater than the residual value.
D) The sales price is greater than the bookvalue and less than the residual value.
4. Silverado Company purchased equipmenthaving an invoice price of $21,100. The terms of sale were 4/10,n/30, and Silverado paid within the discount period. In addition,Silverado paid a $155 delivery charge, $225 installation charge,and $947 sales tax. The amount recorded as the cost of thisequipment is:
A) $21,583.
B) $20,636
D) $21,480
6. On March 2, 2009, Farlow Industriespurchased a fleet of automobiles at a cost of $660,000. The carsare to be depreciated by the straight-line method over six yearswith no salvage value. Farlow uses the half-year convention tocompute depreciation for fractional periods. The book value of thefleet of automobiles at December 31, 2010, will be:
A) $495,000.
B) $440,000.
D) $400,000
7. Which of the following would not beamortized?:
A) Oil well
B) Copyright
D) Patent
8. Del Rey Imports sold a depreciable plantasset for cash of $25,000. The accumulated depreciation amounted to$60,000, and a loss of $5,000 was recognized on the sale. Underthese circumstances, the original cost of the asset must havebeen:
B) $65,000
C) $80,000
D) $90,000
9. Total stockholders' equity of ConcordCompany is $3,000,000. The fair market value of Concord's netidentifiable assets (assets less liabilities) is $4,000,000.Wheeler Corporation makes an offer to purchase Concord's entirebusiness for $4,800,000. In this situation:
A) Concord Company should report goodwillof $800,000 in its balance sheet.
B) Concord Company should report goodwillof $1,800,000 in its balance sheet.
D) Wheeler Corporation is willing to pay$800,000 for goodwill generated by Concord, and Wheeler will reportthis goodwill in its balance sheet if the purchase isfinalized.
12. If an asset is determined to beimpaired, it should be:
A. depreciated only using the straight-linemethod
C. reclassified as a liability
D. written down to its fair marketvalue
1. A gain is recognized on the disposal of plant assetswhen:
A) The sales price is greater than theresidual value but less than the book value.
C) The sales price is greater than the bookvalue and greater than the residual value.
D) The sales price is greater than the bookvalue and less than the residual value.
4. Silverado Company purchased equipmenthaving an invoice price of $21,100. The terms of sale were 4/10,n/30, and Silverado paid within the discount period. In addition,Silverado paid a $155 delivery charge, $225 installation charge,and $947 sales tax. The amount recorded as the cost of thisequipment is:
A) $21,583.
B) $20,636
D) $21,480
6. On March 2, 2009, Farlow Industriespurchased a fleet of automobiles at a cost of $660,000. The carsare to be depreciated by the straight-line method over six yearswith no salvage value. Farlow uses the half-year convention tocompute depreciation for fractional periods. The book value of thefleet of automobiles at December 31, 2010, will be:
A) $495,000.
B) $440,000.
D) $400,000
7. Which of the following would not beamortized?:
A) Oil well
B) Copyright
D) Patent
8. Del Rey Imports sold a depreciable plantasset for cash of $25,000. The accumulated depreciation amounted to$60,000, and a loss of $5,000 was recognized on the sale. Underthese circumstances, the original cost of the asset must havebeen:
B) $65,000
C) $80,000
D) $90,000
9. Total stockholders' equity of ConcordCompany is $3,000,000. The fair market value of Concord's netidentifiable assets (assets less liabilities) is $4,000,000.Wheeler Corporation makes an offer to purchase Concord's entirebusiness for $4,800,000. In this situation:
A) Concord Company should report goodwillof $800,000 in its balance sheet.
B) Concord Company should report goodwillof $1,800,000 in its balance sheet.
D) Wheeler Corporation is willing to pay$800,000 for goodwill generated by Concord, and Wheeler will reportthis goodwill in its balance sheet if the purchase isfinalized.
12. If an asset is determined to beimpaired, it should be:
A. depreciated only using the straight-linemethod
C. reclassified as a liability
D. written down to its fair marketvalue
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