1.) Berger Company purchased equipment having an invoice price of $22,500. The terms of sale were 3/10, n/60, and Berger paid within the discount period. In addition, Berger paid a $235 delivery charge, $615 installation charge, and $1,528 sales tax. Berger paid for optional accident insurance for transport of the equipment amounting to $35. The amount recorded as the cost of this equipment is:
2.) The cost of successfully defending a patent in an infringement suit should be
added to the cost of the patent.
charged to Legal Expenses.
deducted from the book value of the patent.
recognized as a loss in the current period.
3.) Mather Company purchased equipment on January 1, 2012 at a total invoice cost of $224,000; additional costs of $4,000 for freight and $20,000 for installation were incurred. The equipment has an estimated salvage value of $8,000 and an estimated useful life of five years. The amount of accumulated depreciation at December 31, 2013 if the straight-line method of depreciation is used is:
4.) In April 2013, Sparkle Enterprises purchased the Crimson Mine at a cost of $18,000,000. The mine is estimated to contain 500,000 tons of ore with a residual value of $2,000,000 after mining operations are completed. During 2013, 120,000 tons of ore were removed from the mine and sold. In this situation:
The amount of depletion deducted from revenue during 2013 is $3,840,000.
The book value of the mine is $16,000,000 at the end of 2013.
The amount of depletion deducted from revenue during 2013 is $2,000,000.
The mine is classified as an intangible asset with in indefinite life and is not amortized.
5.) The units-of-activity method is generally not suitable for
6.) On May 1, 2013, Pinkley Company sells office furniture for $150,000 cash. The office furniture originally cost $375,000 when purchased on January 1, 2006. Depreciation is recorded by the straight-line method over 10 years with a salvage value of $37,500. What depreciation expense should be recorded on this asset in 2013?
7.) The cost of land includes all of the following except
real estate brokers’ commissions.
accrued property taxes.
8.) The interest charged on a $200,000 note payable, at the rate of 8%, on a 90-day note would be
9.) Which of the following statements about liabilities is incorrect?
Companies sometimes show
liabilities in order of magnitude.
liabilities before assets.
long-term liabilities before current assets.
current liabilities netted against current assets.
10.) The market interest rate is often called the
11.) A retail store credited the Sales Revenue account for the sales price and the amount of sales tax on sales. If the sales tax rate is 5% and the balance in the Sales Revenue account amounted to $273,000, what is the amount of the sales taxes owed to the taxing agency?
12.) Corporations are granted the power to issue bonds through
federal security laws.
13.) Farris Company borrowed $800,000 from BankTwo on January 1, 2012 in order to expand its mining capabilities. The five-year note required annual payments of $208,349 and carried an annual interest rate of 9.5%. What is the balance in the notes payable account at December 31, 2013?
14.) Bonds that are secured by real estate are termed
15.) Which of the following is usually not an accrued liability?