ACCT 212 Week 6 Quiz (GRADED A+)
Week Six Quiz
1. Which of the following expenditures should be recorded as an asset?
Interest costs during the construction period of a new building.
2. A company purchased land and building from a seller for $900,000. A separate appraisal
reveals the fair value of the land to be $200,000 and the fair value of the building to be
$800,000. For what amount would the company record land at the time of purchase?
$180,000
3. Kansas Enterprises purchased equipment for $80,500 on January 1, 2021. The
equipment is expected to have a ten-year service life, with a residual value of $7,350 at
the end of ten years.
Using the straight-line method, depreciation expense for 2021 would be:
Cost of Equipment: $80,500
Less: salvage value: $7,350
Depreciatable value: $73,150
Estimated Life: 10 years
Straight Line Method
Annual Depreciation: Depreciable Value / Life
Depreciation Per Annuam: $73,150/10 = $7,315
Years Depreciation Expenses Accumulated Depreciation Book Value
At Acquisition $80,500
1 $7,315 $7,315 $73,185
2 $7,315 $14,630 $65,870
3 $7,315 $21,945 $58,555
4 $7,315 $29,260 $51,240
5 $7,315 $36,575 $43,925
6 $7,315 $43,890 $36,610
7 $7,315 $51,205 $29,295
8 $7,315 $58,520 $21,980
9 $7,315 $65,835 $14,665
10 $7,315 $73,150 $7,350
a. Kansas Enterprises purchased equipment for $72,500 on January 1, 2021. The
equipment is expected to have a five-year service life, with a residual value of
$8,700 at the end of five years.
Using the straight-line method, depreciation expense for 2021 would be:
Cost of Equipment: $72,500
Less: salvage value: $8,700
Depreciatable value: $63,800
Estimated Life: 5 years
Straight Line Method
Annual Depreciation: Depreciable Value / Life
Depreciation Per Annuam: $63,800/5 = $12,760
4. Kansas Enterprises purchased equipment for $74,000 on January 1, 2021. The equipment is
expected to have a five-year service life, with a residual value of $7,800 at the end of five years.
This study source was downloaded by 100000801755870 from CourseHero.com on 04-04-2022 11:48:49 GMT -05:00
https://www.coursehero.com/file/67486229/Week-Six-Quizdocx/
Week Six Quiz
1. Which of the following expenditures should be recorded as an asset?
Interest costs during the construction period of a new building.
2. A company purchased land and building from a seller for $900,000. A separate appraisal
reveals the fair value of the land to be $200,000 and the fair value of the building to be
$800,000. For what amount would the company record land at the time of purchase?
$180,000
3. Kansas Enterprises purchased equipment for $80,500 on January 1, 2021. The
equipment is expected to have a ten-year service life, with a residual value of $7,350 at
the end of ten years.
Using the straight-line method, depreciation expense for 2021 would be:
Cost of Equipment: $80,500
Less: salvage value: $7,350
Depreciatable value: $73,150
Estimated Life: 10 years
Straight Line Method
Annual Depreciation: Depreciable Value / Life
Depreciation Per Annuam: $73,150/10 = $7,315
Years Depreciation Expenses Accumulated Depreciation Book Value
At Acquisition $80,500
1 $7,315 $7,315 $73,185
2 $7,315 $14,630 $65,870
3 $7,315 $21,945 $58,555
4 $7,315 $29,260 $51,240
5 $7,315 $36,575 $43,925
6 $7,315 $43,890 $36,610
7 $7,315 $51,205 $29,295
8 $7,315 $58,520 $21,980
9 $7,315 $65,835 $14,665
10 $7,315 $73,150 $7,350
a. Kansas Enterprises purchased equipment for $72,500 on January 1, 2021. The
equipment is expected to have a five-year service life, with a residual value of
$8,700 at the end of five years.
Using the straight-line method, depreciation expense for 2021 would be:
Cost of Equipment: $72,500
Less: salvage value: $8,700
Depreciatable value: $63,800
Estimated Life: 5 years
Straight Line Method
Annual Depreciation: Depreciable Value / Life
Depreciation Per Annuam: $63,800/5 = $12,760
4. Kansas Enterprises purchased equipment for $74,000 on January 1, 2021. The equipment is
expected to have a five-year service life, with a residual value of $7,800 at the end of five years.
This study source was downloaded by 100000801755870 from CourseHero.com on 04-04-2022 11:48:49 GMT -05:00
https://www.coursehero.com/file/67486229/Week-Six-Quizdocx/
