Multiple Choice Questions 1 A method that excludes

residual value from #2504

Multiple Choice Questions1. A method that excludes residual value from the depreciation base
for the calculation of depreciation is: a. Straight- line b. Sum- of- the- years’- digits c. Double-
declining- balance d. Activity2. Vorst depreciates Asset A on the double- declining-balance
method. How much depreciation expense should Vorst record in 2017 for Asset A? a. $ 32,000
b. $ 25,600 c. $ 14,400 d. $ 6,4003. Using the sum- of- the- years’- digits method, how much
depreciation expense should Vorst record in 2017 for Asset B? a. $ 6,000 b. $ 9,000 c. $ 11,000
d. $ 12,0004. Vorst depreciates Asset C by the straight- line method. On June 30, 2017, Vorst
sold Asset C for $ 28,000 cash. How much gain (loss) should Vorst record in 2017 on the
disposal of Asset C?a. $ 2,800 b. ($ 2,800) c. ($ 5,600) d. ($ 8,400)5. A machine with a 4- year
estimated useful life and an estimated 15% residual value was acquired on January 1. Would
depreciation expense using the sum-of- the- years’- digits method be higher or lower than
depreciation expense using the double- declining-balance method in the first and second
years?6. At the end of the expected useful life of a depreciable asset with an estimated 15%
residual value, the accumulated depreciation would equal the original cost of the asset under
which of the following depreciation methods?7. The composite depreciation method:a. Is
applied to a group of homogeneous b. Is an accelerated method of depreciation c. Does not
recognize gain or loss on the retirement of single assets in the group d. Excludes residual value
from the base of the depreciation calculation8. On July 1, 2015, Mundo Corporation purchased
factory equipment for $ 50,000. Residual value was estimated at $ 2,000. The equipment will be
depreciated over 10 years using the double- declining-balance method. Counting the year of
acquisition as one- half year, Mundo should record 2016 depreciation expense of:a. $ 7,680 b. $
9,000 c. $ 9,600 d. $ 10,0009. A fixed asset with a 5- year estimated useful life is sold during
the second year. How would the use of the straight- line method of depreciation instead of the
double- declining- balance method of depreciation affect the amount of gain or loss on the sale
of the fixed asset??10. Crowder Company acquired a tract of land containing an extractable
natural resource. Crowder is required by the purchase contract to restore the land to a condition
suitable for recreational use after it has extracted the natural resource. Geological surveys
estimate that the recoverable reserves will be 5,000,000 tons and that the land will have a value
of $ 1,000,000 after restoration. Relevant cost information follows: Land $ 9,000,000 Estimated
restoration costs 1,500,000 If Crowder maintains no inventories of extracted material, what
should be the depletion per ton of extracted material?a. $ 2.10 b. $ 1.90 c. $ 1.80d. $ 1.60View
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Multiple Choice Questions 1 A method that excludes residual value from

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