chapter 9 mcqs 494544

Quiz Questions for Chapter 9 1. A truck was purchased for $25,000. It has a six-year life and a $4,000 salvage value. Under the straight-line method, what is the assets carrying value (book value) after 2 1/2 years? a. $8,750. b. $12,250. c. $14,583. d. $16,250. 2. On January 1, 20X1, Superior Landscaping Company paid $17,000 to buy a stump remover. If the equipment is used to remove 2,500 stumps per year, it would have an estimated useful life of 10 years and a salvage value of $4,500. The amount of depreciation to be recorded for the year 20X1, using the units-of-production method and assuming that 3,500 units were produced, is a. $2,380. b. $1,750. c. $1,700. d. $1,250. 3. The sale of equipment costing $8,000 with accumulated depreciation of $6,700 and a sale price of $2,000 would result in a a. gain of $2,000. b. gain of $700. c. loss of $700. d. loss of $1,300. 4. Underestimating the number of tons of a mineral that can be mined over a mineral deposit’s life will result in a. overstated net income each year. b. overstated total assets each year. c. overstated depletion expense each year. d. no effect on total assets each year. 5. A copyright is obtained for what becomes a very successful book. The publisher expects the book to generate sales for 10 years. The copyright should be amortized over a. 2 to 4 years. b. 10 years. c. 40 years. d. the author’s life plus 50 years. The following information pertains to the next two questions. Z Company purchased an asset that cost $24,000 on January 1, 20X2. The asset was expected to have a four-year life and a $4,000 salvage value. 6. The amount of depreciation expense for 20X4 under the double-declining-balance method would be: a. $2,000. b. $3,000. c. $6,000. d. $12,000. 7. Assume that Z Company uses the straight-line depreciation method. If on January 1, 20X5, Z Company sells the asset for $10,000, the cash flow statement would reflect a: a. $1,000 cash inflow from gain on the sale of the…