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Financial and managerial accounting

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1. Use the following data for questions 1 and 2.On March 12, 2005, Trio, Inc. acquired melting equipment for $37,000. The estimated life of the equipment is 7 years, with an estimated residual value of $9,000.Refer to above data. In its financial statements, Trio uses straight-line depreciation with the half-year convention. The book value of the equipment at December 31, 2006, will be:
A.
Some other amount
B.
$35,000
C.
$29,000
D.
$31,000

2. Refer to data in Question 1. In its financial statements, Trio uses double-declining-balance depreciation with half-year convention. The book value of the equipment at December 31, 2006, will be:
A.
Some other amount
B.
$23,286
C.
$22,653
D.
$21,035

3. Koo Dairy sold a delivery truck for cash of $6,400. The original cost of the truck was $26,000, and a loss of $4,000 was recognized on the sale. The accumulated depreciation at the date of sale must have been:
A.
Some other amount
B.
15,600
C.
$10,400
D.
$19,600

4. Doug Corporation purchased Leslie Company's entire business for $3,200,000. The fair market value of Leslie's net identifiable assets is $2,900,000.
A.
Leslie should record amortization over a period not to exceed 40 years.
B.
Doug should charge the $300,000 excess paid for Leslie Company directly to expense.
C.
Doug paid $300,000 for goodwill generated by Leslie.
D.
Leslie should record goodwill of $300,000.

5. Throughout the current year, Horison Company treated sales taxes paid on purchases of plant assets as an operating expense. As a result, the current year's:
A.
None of the above; payments of sales taxes should be treated as revenue expenditures.
B.
Revenue is overstated
C.
Depreciation expense is understated.
D.
Net income is overstated

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