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Question
Which one of the following depreciation methods will typically result in the smallest earnings per share during the early periods of an asset's life?
a. 150% declining balance method.
b. Units of production method.
c. Double-declining-balance method.
d. Straight-line method.
Answer
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Related questions
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A machine was purchased on January 1 for $100,000. The machine has an estimated useful life of 5 years with a salvage value of $20,000. Under the straight-line method, the book value and the accumulated depreciation of the machine at the end of year two is respectively,
a. $60,000 and $40,000
b. $68,000 and $32,000
c. $40,000 and $60,000
d. $48,000 and $32,000
Q:
A machine was purchased on January 1 for $50,000. The machine has an estimated useful life of 10 years with a salvage value of $2,000. Under the double-declining-balance, depreciation expense for each of the first two years is, respectively,
a. $12,000 and $12,000.
b. $10,000 and $8,000.
c. $12,000 and $9,500.
d. $12,500 and $12,500.
Solution: $50,000 x 2/10 and ($50,000 - $10,000) x 2/10
Q:
Sandeep Inc. uses double-declining-balance depreciation for an asset with a 4-year life expectancy and no salvage value. Depreciation expense for the second year of the asset's life is calculated by:
a. [2 x Book Value]/4
b. [2 x (Cost Salvage Value]/4
c. [(2 x Book Value)/4] Accumulated Depreciation
d. [2 x Cost]/4
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a. increases total assets.
b. decreases total assets.
c. decreases the current ratio.
d. increases the quick ratio.
Q:
Accumulated depreciation is an account which:
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b. is a long-term liability.
c. is equal to total depreciation expense recorded and decreases total plant and equipment.
d. reduces intangible assets.
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Which one of the following actions will help solve a cash shortage problem?
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b. Recognize depreciation expense
c. Purchased long-lived asset by issuing long-term debt
d Retire plant assets at salvage value
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Which one of the following should be classified as land on the balance sheet?
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b. Mineral rights representing gold in the soil
c. Two tracts of property that houses the companys backup computer site
d. Sidewalks and driveways which lead to the companys office building
Q:
A significant difference in depreciation accounting between US GAAP and IFRS accounting is that in IFRS:
a. Management has the option of periodically revaluing property, plant and equipment to market value
b. Management is mandated to revaluing property, plant and equipment to market value
c. Management may use hypothetical future value in depreciating assets
d. There are no differences in depreciation accounting between US GAAP and IFRS
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How do intangible assets differ from long-lived plant assets?
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4. Bradley Corporation began business on January 1. During January, Bradley reported the following: January 1 purchase: 100 units @ $10 = $1,000 January 10 purchase: 150 units @ $14 = $2,100 January sales: 200 units Determine the amount of the inventory valuation on January 31 under the averaging cost flow assumption.
Q:
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2. Before adjusting entries, Dormont Corps accounts receivable and allowance for doubtful accounts are $800,000 and $7,000 (credit balance), respectively. Using an aging schedule of accounts receivable, it is determined that $44,000 of the accounts receivable would probably be uncollectible. Calculate the net realizable value of Dormonts receivables at year end.
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On December 31, 2015, total assets and liabilities are measured at $18,000 and $12,000, respectively. The total market value of the company's common stock is $7,000. At what amount would shareholders' equity be measured on the December 31, 2015 balance sheet?
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A sequence of events affecting the shareholders' equity section of Malabar Corporation follows:
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B. On May 16, a 3-for-1 stock split was distributed.
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Q:
The shareholders' equity section of Maven Corporation's balance sheet as of December 31, 2014 is as follows: Common stock, $1 par; authorized, 6,000 shares; 2,000 shares issued
$ 2,000 Additional paid-in capital
60,000 Retained earnings
58,000 Total shareholders equity
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June 16 - A 15% stock dividend was declared and issued. Market value per share is currently $18.
October 11 - A three-for-one split was carried out. Market value was $21 per share.
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Canton Corporation shareholders' equity section of its balance sheet as of December 31, 2014 is as follows: Common stock, $5 par value; 40,000 shares authorized
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+ A and + SE (Contributed Capital) c.
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+ A and A e.
+ A and + L f.
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On January 1, 2014, Enron Corporation issued a 4-year, 7%, $9,000 bond payable. Beginning in 2015, interest is payable annually every January 1. The market rate of interest at issuance is 9%. How much are the interest payments by Enron? Why is the amount of interest expense different than the cash payments?
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On January 1, 2014, Mango Corporation issued a 3-year, 4%, $3,000 bond payable. Beginning in 2015, interest is payable every year on January 1 over the life of the bond. The market rate of interest on January 1, 2014 is 6%. What are the proceeds received by Mercer from the issue of this bond on January 1, 2014?