Exam 9: Reporting and Analyzing Long-Lived Assets

On July 1, 2012, Lott Enterprises sold equipment with an original cost of $95,000 for $50,000. The equipment was purchased January 1, 2011, and was depreciated using the straight-line method assuming a five year useful life and $5,000 salvage value. The necessary entries for 2012 include a:

Equipment was purchased for $51,000. Freight charges amounted to $2,100 and there was a cost of $6,000 for building a foundation and installing the equipment. It is estimated that the equipment will have a $9,000 salvage value at the end of its 5-year useful life. Depreciation expense each year using the straight-line method will be:

The Kandy Company has total cash register receipts of $8,820. This total includes a 5% sales tax. The entry to record the receipts will include a:

The amortization of premium on bonds payable:

A $300,000, 5%, 20-year bond was issued at 97. The proceeds received from the bond issuance are:

The Land account would include all of the following costs except:

Which one of the following would not be considered an advantage of the corporate form of organization?

The Lewing Company purchases 1,000 shares of its common stock for $20,000. The $20,000 amount should be debited to:

Retained earnings is affected by each of the following except a: