19 on january 1 2015 anodel inc acquired a machine for 1 000 000 the estimated usefu 4307047

19 on january 1 2015 anodel inc acquired a machine for 1 000 000 the estimated usefu 4307047

19) On January 1, 2015, Anodel Inc. acquired a machine for $1,000,000. The estimated useful life of the asset is 5 years. The residual value at the end of 5 years is estimated to be $50,000. What is the book value of the machine at the end of 2016, if the company uses the straight-line method of depreciation?

A) $600,000,

B) $620,000

C) $570,000

D) $550,000

20) On January 1, 2015, Zade Manufacturing Company purchased a machine for $40,000,000. The company expects to use the machine for 24,000 hours over the next 6 years. The estimated sale value of the machine at the end of the sixth year is $40,000. The company used the machine for 3,600 hours in 2015 and 5,000 hours in 2016. What is depreciation expense for the year 2015 if the company uses the units-of-production method of depreciation?

A) $5,994,000,

B) $13,333,333

C) $6,666,660

D) $12,222,000

21) On January 1, 2015, Zade Manufacturing Company purchased a machine for $40,000,000. The company expects to use the machine for 24,000 hours over the next 6 years. The estimated sale value of the machine at the end of the sixth year is $40,000. The company used the machine for 3,600 hours in 2015 and 5,000 hours in 2016.

Calculate book value of the machine at the end of 2016 if the company uses the units-of-production method of depreciation.

A) $25,681,000

B) $17,777,778

C) $28,532,688

D) $24,352,951

22) Which of the following is true when the estimate of an asset's useful life is changed?

A) The new estimate is ignored until the last year of the asset's life.

B) The depreciation expense in the prior year is restated.

C) Prior years' financial statements must be restated.

D) Asset's remaining book value will be spread over the asset's remaining life.

23) Caterpillers Inc., a manufacturing company, acquired equipment on January 1, 2012 for $500,000. Estimated useful life of the equipment was 7 years and the estimated residual value was $10,000. On January 1, 2015, after using the equipment for 3 years, the total estimated useful life has been revised to 9 years. Residual value remains unchanged. The company uses the straight-line method of depreciation. Calculate depreciation expense for the year 2015.

A) $48,333

B) $46,666

C) $26,666

D) $33,333

24) Cost of an asset is $1,000,000 and its residual value is $100,000. Estimated useful life of the asset is four years. Calculate depreciation for the first year using the double-declining-balance method of depreciation.

A) $450,000

B) $500,000

C) $250,000

D) $225,000

25) Cost of an asset is $1,000,000 and its residual value is $100,000. Estimated useful life of the asset is four years. Calculate depreciation for the second year using the double-declining-balance method of depreciation.

A) $250,000

B) $225,000

C) $450,000

D) $240,000

26) A company purchased a computer on July 1, 2015 for $50,000. Estimated useful life of the computer was 5 years and it has no residual value. Which of the following methods should be used to best match its expense against the revenue it produces?

A) the units-of-production method

B) the straight-line method

C) the double-declining-balance method

D) the first-in, first-out method

27) Iverycoast Inc. purchased a van on January 1, 2015, for $800,000. Estimated life of the van was 5 years, and its estimated residual value was $90,000. Iverycoast uses the straight-line method of depreciation. Calculate the book value of the van at the end of 2015.

A) $650,000,

B) $750,000

C) $710,000

D) $658,000

28) Iverycoast Inc. purchased a van on January 1, 2015, for $800,000. Estimated life of the van was 5 years, and its estimated residual value was $90,000. Iverycoast uses the straight-line method of depreciation. At the beginning of 2017, the company revised the total estimated life of the asset from 5 years to 6 years. The estimated residual value remained the same as estimated earlier. Calculate the depreciation expense for the year 2017.

A) $142,000

B) $145,000

C) $106,500

D) $110,000

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