Accounting Fundamentals For Financial Institutions QUIZ

Quiz, Chapters 4, 6

44 NEU – FIN6101 Quiz # 2, Chapters 4 and 6
PLEASE PRINT NAME ———-> Bill Reeve: You may only enter your name, answers, and use the area to the right for your calculations. This area is available for your calculations.
WARNING – Your exam is incomplete – please check column A for 1s to identify the incomplete question(s)
Questions 1 – 5 are a total of 40 points.
The following information pertains to questions 1 – 5. A
On June 1, Year 1, ABC firm bought (50% cash, 50% 90-day note for ALL associated costs) and placed into service a machine B
costing $62,000. In order to install the machine, the company also had to pay $2,000 in installation fees. It is anticipated that the C
machine will produce 48,000 hours of production and will have salvage value of $4,000 at the end of its useful life, which is 5 years. D
During Year 1, the machine is used for a total of 6,000 hours and in Year 2, the machine is used for a total of 15,000 hours. E
F
1) Calculate the depreciation for the first two calander years (June 1 – December 31 and the full second year)
for all three methods (Staight-line, units of production, and DDB).
June 1 – Dec.31, Year 1 January 1 – Dec. 31, Year 2
Straight-line Method: A. $6,767 $11,200
B. $7,000 $11,600
C. $7,233 $12,000
D. $7,467 $12,400
E. $7,700 $12,800
1 F. $8,000 $13,200
1 Select your answers here ———–>
June 1 – Dec.31, Year 1 January 1 – Dec. 31, Year 2
Units of Production: A. $7,000 $18,125
B. $7,250 $18,750
C. $7,500 $19,375
D. $7,750 $20,000
E. $8,000 $20,625
1 F. $8,250 $21,250
1 Select your answers here ———–>
June 1 – Dec.31, Year 1 January 1 – Dec. 31, Year 2
DDB Method: A. $13,067 $17,173
B. $13,533 $17,787
C. $14,000 $18,400
D. $14,467 $19,013
E. $14,933 $19,627 `
1 F. $15,400 $20,240
1 Select your answers here ———–>
2) Show the journal transaction to record the acquisition on June 1.
Date Account Description Debit Credit
1 1-Jun
1 CASH
1
3) Record the depreciation expense on December 31, Year 1 using the units of production method.
Date Account Description Debit Credit
1 31-Dec
1
4) On March 13th, Year 3, the company sold the machine for $22,000 cash. The total usage inYear 3 was 2,000 hours.
Record the adjusting depreciation entry in Year 3 based on units of production
Date Account Description Debit Credit
1 13-Mar
1
5) Record the dispostion entry based on the assst’s depreciation history using the units of production method.
Date Account Description Debit Credit
1 13-Mar $22,000
1
1

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