178 180 factory e-M.rnent on Juro 1,2012, sor S80.000 "..akse expenee al December 31, 2012, d 83 128 Company bougt a machine on January 1, 2012. Theachino and had u an eected salvage value of $18.000 The ife of the machne was years The depreciable cost of the machine a $108.000 b 800.000 e 830.,000 d $18,000 A pain or loss on disposal of a plant asset is determined by comparing the a replacement cost of the asset with the asset's original cost b book value of the asset with the asset's original cost e orinal cost of the asset with the proceeds received from ts sale d book value of the asset with the proceeds received from is sale 0 Equipment that cost 836,000 and on which $20,000 of acoumulated depreciation has been reodd was disposed of for $18,000 cash. The entry to record this event would indlude s a. gain of $2.000 b loss of $2.000 e credit to the Equipment account for $6,000 of96% has a selling price of 11. Abond witha face value of $200,000 and a quoted price a. $196,500 b. $196,100 . S196010. d. $197,000 cost $240,000, had an estimated 5-year life and an expected salvage value of 340,000 The Accumulated Depreciation account had a balance of $140,000 on January 1, 2012 12 On July 1, 2012, Fleming Company sells machinery for $96,000. The machinery originaly using the straight-line method. The gain or loss on disposal is a $16,000 gain. b $4,000 loss c $8,000 loss d. $4,000 gain The following information is provided tor (in $ Net income 2012 Net sales 2012 Total assets 12/31/10 Total assets 12/31/1 Total assets 12/31/12 Company and Northwest Corporaion 1,500 1,000 1,050 150 4,100 2.400 3,000 What is Northwests asset turnmover ratlo for a. 1.17 times b. 1.05 times c. 1.52 times d. 1.03 times 4,000 for 20127 14. Cost allocation of an intangible asset is referred to as a. amortization. b. c. accretion. d. capitalization. 15. Which of the following is not a a. A Note Payable due December 31, 2013 b. An Accounts Payable due January 31, 2013. C. A lawsuit judgment to be decided on January 10, 2013. d. Accrued salaries payable from 2012. current liability on December 31, 20127 to record payment of the 0,800 80,000 16. On October 1, month, $80,000, 4% note. The entry by Sam's Painting Service note and accrued interest on January 1 is Sam's Painting Service borrows $80,000 from National Bank on a 3- 80,800 a. Notes Payable Cash b. Notes Payable 80,800 Interest Payable 80,000 3,200 Cash 80,000 83,200 80,800 c. Notes Payable Interest Payable Cash 800 d. Notes Payable Interest Expense Cash 17. The interest charged on a $50,000 note payable, at the rate of 6%, on a 90-day note would be a. $3,000. b. $1,500. c. $750 d. $500 The amount of sales tax collected by a retail store when making sales is a. a miscellaneous revenue for the store. 18. a current liability C. not recorded because it is a tax paid by the customer. d. recorded as an operating expense. b. A cash register tape shows cash sales of 36,000 and sales taxes of $250. The u Sales Tax Revenue 5,000 c. Cash 5.250 5000 Sales Tax Expense d Cash Sale 250 Sales Sales Taxes Payable 5250 5,000 5.250 20. The panywing totais for the month of Apri were taken from the payro register of Nol FICA taxes withheld Income taxes withheld $48,000 2,200 10,000 1,800 128 864 Federal unemployment taxes taxes entry to record accrual of employers payroll taxes would include a a. debit to Payroll Tax Expense for $992 b. debit to Payroll Tax Expense for $3,192 G. credit to FICA Taxes Payable for $4,400 d. credit to Payroll Tax Expense for $992. Julie Lambert has a large consulting practice. New clients are required to pay one-hait of the consulting fees up front. The balance is paid at the conclusion of the consultation. How does Lambert account for the cash received at the end of the engagement? a. Cash Unearned Consulting Revenue b. Cash Unearned Consulting Revenue Earned Consulting Revenue C. Prepaid Consulting Revenue d. No entry is required when the engagement is concluded. A measure of a company's solvency is the Earned Consulting Revenue 22. a. acid-test ratio. b. current ratio. c. times interest earned ratio. d. asset turnover ratio. Liquidity ratios measure a company's a. operating cycle. 23. b. revenue-producing ability C. Short-term debt paying ability. d. long-range solvency MULTIPLE CHOICE QUESTIONS 1. A cmpany purchased land for $72,000 cash. Real estate brokers commission was 00 and $7.000 was spent for demolishing an old building on the land be construction of a new building could start. Proceeds from salvage of the demolished building was $1,200. Under the cost principle, the cost of land would be recorded at a. $82.800 b. $72,000 c. $77,800. d. $84,000. 2. Carpino Company purchased equipment and these costs were incurred Cash price Sales taxes Insurance during transit Installation and testing Total costs $90,000 4,500 750 $96,750 What amount should be recorded as the cost of the equipment? a. $90,000. b. $94,500. c. $95,250. d. $96,750. 3. All leases are classified as either a. capital leases or long-term leases. b. capital leases or operating leases c. operating leases or current leases, d. long-term leases or current leases. The cost of a long-term asset is expensed a. when it is paid for b. as the asset benefits the company. c. in the period in which it is acquired. d. 4. in the period in which it is disposed of. 5. Depreciation is a process of a. asset devaluation. b. cost accumulation. C, cost allocation. d. asset valuation