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 |