Strayer ACC 557 Week 7 Chapter 9 and Chapter 10 Quiz
This Tutorial contains All possible Questions from this chapter
Question no 1
A company has the following assets:
Buildings and Equipment, less accumulated depreciation of $2,000,000 $ 7,600,000
Copyrights 960,000
Patents 4,000,000
Timberlands, less accumulated depletion of $2,800,000 4,800,000
The total amount reported under Property, Plant, and Equipment would be
- $16,400,000.
- $13,360,000.
- $12,400,000.
- $17,360,000.
Question no 2
Expenditures that maintain the operating efficiency and expected productive life of a plant asset are generally
- expensed when incurred.
- not recorded until they become material in amount.
- capitalized as a part of the cost of the asset.
- debited to the Accumulated Depreciation account
Question no 3
A gain or loss on the disposal of a plant asset is determined by comparing the
- original cost of the asset with the proceeds received from its sale.
- book value of the asset with the asset’s original cost.
- book value of the asset with the proceeds received from its sale.
- replacement cost of the asset with the asset’s original cost.
Question no 4
Salem Company hired Kirk Construction to construct an office building for £8,000,000 on land costing £2,000,000, which Salem Company owned. The building was complete and ready to be used on January 1, 2013, and it has a useful life of 40 years. The price of the building included land improvements costing £600,000 and personal property costing £750,000. The useful lives of the land improvements and personal property are 10 years and 5 years, respectively. Salem Company uses component depreciation, and the company uses straight-line depreciation for other similar assets. What is the net amount reported for the building on Salem Company’s December 31, 2013 statement of financial position?
- £7,573,750
- £6,483,750
- £7,800,000
- £7,665,000
Question no 5
Yocum Company purchased equipment on January 1 at a list price of $100,000, with credit terms 2/10, n/30. Payment was made within the discount period and Yocum was given a $2,000 cash discount. Yocum paid $5,000 sales tax on the equipment, and paid installation charges of $1,760. Prior to installation, Yocum paid $4,000 to pour a concrete slab on which to place the equipment. What is the total cost of the new equipment?
- $104,760
- $108,760
- $110,760
- $101,000
Question no 6
A company purchased factory equipment for $350,000. It is estimated that the equipment will have a $35,000 salvage value at the end of its estimated 5-year useful life. If the company uses the double-declining-balance method of depreciation, the amount of annual depreciation recorded for the second year after purchase would be
- $84,000.
- $140,000.
- $126,000.
- $60,480.
Question no 7
On a balance sheet, natural resources may be described more specifically as all of the following except
- oil reserves.
- timberlands.
- land improvements.
- mineral deposits.
Question no 8
On January 1, 2013, Donahue Company, a calendar-year company, issued $500,000 of notes payable, of which $125,000 is due on January 1 for each of the next four years. The proper balance sheet presentation on December 31, 2013, is
- Current Liabilities, $125,000; Long-term Debt, $375,000.
- Current Liabilities, $375,000; Long-term Debt, $125,000.
- Current Liabilities, $500,000.
- Long-term Debt , $500,000.
STATUS
Question no 9
When an interest-bearing note matures, the balance in the Notes Payable account is
- less than the total amount repaid by the borrower.
- the difference between the maturity value of the note and the face value of the note.
- equal to the total amount repaid by the borrower.
- greater than the total amount repaid by the borrower
Question no 10
- interest must be paid on a periodic basis regardless of earnings.
- the bondholders do not have voting rights.
- income to stockholders may increase as a result of trading on the equity.
- bond interest is deductible for tax purposes.
Question no 11
The times interest earned ratio is computed by dividing
- income before interest expense by interest expense.
- net income by interest expense.
- income before income taxes and interest expense by interest expense.
- income before income taxes by interest expense.
Question no 12
If the market interest rate is greater than the contractual interest rate, bonds will sell
- at a discount.
- only after the stated interest rate is increased.
- at face value.
- at a premium.
Question no 13
The market interest rate is often called the
- coupon rate.
- contractual rate.
- stated rate.
- effective rate.
Question no 14
On October 1, Steve’s Carpet Service borrows $250,000 from First National Bank on a 3-month, $250,000, 8% note. The entry by Steve’s Carpet Service to record payment of the note and accrued interest on January 1 is
- Notes Payable 255,000
Cash 255,000 - Notes Payable 250,000
Interest Payable 5,000
Cash 255,000 - Notes Payable 250,000
Interest Payable 20,000
Cash 270,000 - Notes Payable 250,000
Interest Expense 5,000
Cash 255,000
Question no 15
Most companies pay current liabilities
- by creating long-term liabilities.
- out of current assets.
- by issuing interest-bearing notes payable.
- by issuing stock.