Exam 3 ACG A C T U A L E X A M T E S T B A N K 2 0 2 0 2 7 P R A C T I C E
QUESTIONS AND STUDY GUIDE COMPLETE ACCURATE
EXAM REAL QUESTIONS WITH WELL ELABORATED
ANSWERS WITH DETAILED RATIONALES (RELIABLE
SOLUTIONS) CURRENTLY UPDATED VERSION 2026
EDITION |GUARANTEED SUCCESS A+ |BRAND NEW!!!
On March 1 of the current year, a company purchases and places
into service new equipment. The cost of the equipment is $125,000.
The equipment has an estimated 5-year life and $25,000 salvage
value at the end of its useful life. What is the depreciation expense
for the current year ending December 31 if the company uses the
straight-line method of depreciation?
16667
A permanent decline in the market value of an asset is called
an impairment
A company purchased equipment for $80,000 on January 1 of its first
year. The equipment's original estimated useful life is 5 years and its
estimated salvage value is $10,000. The company uses the straight-
line method of depreciation. On December 31 of its second year,
before year-end adjusting entries have been recorded, the
company decides to extend the estimated useful life 1 year giving it
a total life of 6 years. The company did not change the salvage
value and continues to use the straight-line method. How much
depreciation expense should be recorded for the second year?
11200
,A company purchased equipment for $100,000 on January 1 of its
first year. The equipment's original estimated useful life is 10 years
and its estimated salvage value is $25,000. The company uses the
straight-line method of depreciation. On December 31 of its sixth
year, before year-end adjusting entries have been recorded, the
company decides to revise the estimated salvage value to $20,000
but the estimated useful life is unchanged. How much depreciation
expense should be recorded for the sixth year?
8500
In the current year, a company sold equipment for $20,000. The
original cost was $80,000, the estimated salvage value was $8,000,
and the expected useful life was 6 years. The equipment was fully
depreciated. How much is the gain or loss on the sale?
12000gain
A truck that cost $45,000 is discarded as worthless. The truck had
already been depreciated by $39,000. The entry to record this event
would include a
debit to Loss on Disposal of Plant Assets for $6,000.
,A company's average total assets are $200,000, depreciation
expense is $10,000, and accumulated depreciation is $60,000. Net
income is $1,000,000. Net sales total $250,000. What is the asset
turnover?
1.25
Which ratio is computed by dividing net income by net sales?
profit margin ratio
A company's average total assets is $240,000, average total equity is
$150,000, and net sales is $60,000. Its return on assets is 12%. What
was the company's net income?
28800
In the current year, a company incurred $160,000 of research and
development costs in its laboratory to develop a new product. It
also spent $25,000 in legal fees for a patent on that new product.
Later in the current year, the company paid $15,000 for legal fees in
a successful defense of its patent. What is the total amount that
should be debited to the company's Patents account in the current
year?
$40,000
, At the start of the current year, a company paid for the following in
cash:
Copyrights, $1,500,000
Equipment, $25,000,000
Goodwill, $4,500,000
Inventory, $1,500,000
Land, $15,000,000
Patents, $2,500,000
Research and development, $1,500,000
Supplies, $4,000,000
Trademarks, $1,200,000
It amortizes its intangibles over 10 years. Determine its current year
amortization expense.
400000
Based on the following year-end account balances, what amount
would the company report on its balance sheet as intangible
assets?
Research and development$1,500,000Accounts Receivable
4,000,000 Trademarks 1,000,000 Goodwill 2,500,000 Equipment
1,500,000 Patents 2,000,000
$5,500,000.
Which one of the following costs will not be included in the cost of
equipment?
Maintenance costs
QUESTIONS AND STUDY GUIDE COMPLETE ACCURATE
EXAM REAL QUESTIONS WITH WELL ELABORATED
ANSWERS WITH DETAILED RATIONALES (RELIABLE
SOLUTIONS) CURRENTLY UPDATED VERSION 2026
EDITION |GUARANTEED SUCCESS A+ |BRAND NEW!!!
On March 1 of the current year, a company purchases and places
into service new equipment. The cost of the equipment is $125,000.
The equipment has an estimated 5-year life and $25,000 salvage
value at the end of its useful life. What is the depreciation expense
for the current year ending December 31 if the company uses the
straight-line method of depreciation?
16667
A permanent decline in the market value of an asset is called
an impairment
A company purchased equipment for $80,000 on January 1 of its first
year. The equipment's original estimated useful life is 5 years and its
estimated salvage value is $10,000. The company uses the straight-
line method of depreciation. On December 31 of its second year,
before year-end adjusting entries have been recorded, the
company decides to extend the estimated useful life 1 year giving it
a total life of 6 years. The company did not change the salvage
value and continues to use the straight-line method. How much
depreciation expense should be recorded for the second year?
11200
,A company purchased equipment for $100,000 on January 1 of its
first year. The equipment's original estimated useful life is 10 years
and its estimated salvage value is $25,000. The company uses the
straight-line method of depreciation. On December 31 of its sixth
year, before year-end adjusting entries have been recorded, the
company decides to revise the estimated salvage value to $20,000
but the estimated useful life is unchanged. How much depreciation
expense should be recorded for the sixth year?
8500
In the current year, a company sold equipment for $20,000. The
original cost was $80,000, the estimated salvage value was $8,000,
and the expected useful life was 6 years. The equipment was fully
depreciated. How much is the gain or loss on the sale?
12000gain
A truck that cost $45,000 is discarded as worthless. The truck had
already been depreciated by $39,000. The entry to record this event
would include a
debit to Loss on Disposal of Plant Assets for $6,000.
,A company's average total assets are $200,000, depreciation
expense is $10,000, and accumulated depreciation is $60,000. Net
income is $1,000,000. Net sales total $250,000. What is the asset
turnover?
1.25
Which ratio is computed by dividing net income by net sales?
profit margin ratio
A company's average total assets is $240,000, average total equity is
$150,000, and net sales is $60,000. Its return on assets is 12%. What
was the company's net income?
28800
In the current year, a company incurred $160,000 of research and
development costs in its laboratory to develop a new product. It
also spent $25,000 in legal fees for a patent on that new product.
Later in the current year, the company paid $15,000 for legal fees in
a successful defense of its patent. What is the total amount that
should be debited to the company's Patents account in the current
year?
$40,000
, At the start of the current year, a company paid for the following in
cash:
Copyrights, $1,500,000
Equipment, $25,000,000
Goodwill, $4,500,000
Inventory, $1,500,000
Land, $15,000,000
Patents, $2,500,000
Research and development, $1,500,000
Supplies, $4,000,000
Trademarks, $1,200,000
It amortizes its intangibles over 10 years. Determine its current year
amortization expense.
400000
Based on the following year-end account balances, what amount
would the company report on its balance sheet as intangible
assets?
Research and development$1,500,000Accounts Receivable
4,000,000 Trademarks 1,000,000 Goodwill 2,500,000 Equipment
1,500,000 Patents 2,000,000
$5,500,000.
Which one of the following costs will not be included in the cost of
equipment?
Maintenance costs
