1.

At the beginning of current year, Dikomasolve Company bought machinery under a contract
that required a down payment of 200,000, plus 24 monthly payments of 100,000 each, for
total cash payments of 2,600,000. The cash equivalent price of the machinery was 2,200,000.

The machinery has an estimated useful life of 10 years and estimated residual value of
100,000. The entity used straight line depreciation.

What amount should be reported as accumulated depreciation of the machinery for the
second year?

A. 210,000
B. 220,000
C. 250,000
D. 420,000

2. Shiftnaataako Company purchased a boring machine on January 1, 2016 for 8,100,000. The
useful life of the machine is estimated at 3 years with a residual value at the end of this period
of 600,000. During the useful life, the expected units of production from the machine are
12,000 units in 2016, 7,000 units in 2017 and 6,000 units in 2018.

What is the depreciation for 2017 using straight line method?

A. 3,600,000
B. 2,100,000
C. 1,800,000
D. 2,500,000

3. On April 1, 2016, Dinamauulit Company purchased a new machine for 4,000,000. The new
machine has an estimated useful life of 8 years and the residual value was estimated to be
400,000. Depreciation was computed on sum of the years’ digits method.

What is the depreciation expense of the machinery on the second year after purchase?

A. 800,000
B. 700,000
C. 1,500,000
D. 2,500,000

4. In relation to #3, what is the depreciation expense of the machinery in 2016?

A. 800,000
B. 600,000
C. 700,000
D. 525,000

5. In relation to #3, what is the depreciation expense of the machinery in 2017?

A. 800,000
B. 600,000
C. 725,000
D. 700,000

6. In relation to #3, what is the accumulated depreciation of the machinery in on Dec 31, 2017?

A. 1,500,000
B. 1,325,000
C. 2,500,000
D. 1700,000
7. Maawakamam Company purchased equipment which was installed and put into service
January 1, 2016 at a total cost of 1,280,000. Residual value was estimated at 80,000. The
equipment is depreciated over 8 years by the double declining balance method.

What amount of depreciation should be reported for 2017?

A. 225,000
B. 240,000
C. 300,000
D. 320,000