1.On January 1 of the current year (Year 1), our companyacquired a truck for $75,000. The estimated useful life of thetruck is 5 years or 100,000 miles. The residual value at the end of5 years is estimated to be $5,000. The actual mileage for the truckwas 22,000 miles in Year 1 and 27,000 miles in Year 2. What is thedepreciation expense for the second year of use (Year 2) if we usethe units of production method?
$14,000
$15,400
$16,800
$18,900
2.On January 1, our company purchased a truck for $85,000. Theestimated useful life of the truck is 4 years. The residual valueat the end of 4 years is estimated to be $5,000.
What is the depreciation expense for the second year of use ifwe use the double-declining balance method?
What is the balance in accumulated depreciation at the end ofthe second year of use if we use the double-declining balancemethod?
What is the book value at the end of the second year of use ifwe use the double-declining balance method.
3.On January 1, our company purchased a truck for $80,000. Theestimated useful life of the truck is 4 years. The residual valueat the end of 4 years is estimated to be $10,000. What is thedepreciation expense for the third year of use if we use thestraight-line method?
$17,500
$20,000
$35,000
$52,500
4.Our company uses the percentage of receivables method toestimate bad debt expense for the year. We had the followingaccount balances on our unadjusted trial balance at the end of theyear (December 31): accounts receivable, debit balance of $150,000;allowance for bad debts, debit balance of $1,000. We estimate that3.5% of accounts receivable at the end of the year areuncollectible. What amount will be debited to bad debt expense whenwe record the adjusting entry?
$4,000
$4,250
$5,250
$6,250
5.Our company uses the percentage of sales method to estimatebad debt expense for the year. Our allowance for bad debts accounthas a credit balance of $1,000 prior to the adjusting entry for baddebt expense. We have estimated that 2% of net credit sales will beuncollectible for the current year. Net credit sales for the yeartotaled $200,000. What amount will be debited to bad debt expensewhen we record the adjusting entry?
3,000
$4,000
$5,000
$6,000
