ACC 291 Final Exam Question Answers

Brevard Corporation purchased a taxicab on January 1, 2013 for $25,500 to use
for its shuttle business. The cab is expected to have a five-year useful life and no
salvage value. During 2014, it retouched the cab's paint at a cost of $1,200,
replaced the transmission for $3,000 (which extended its life by an additional 2
years), and tuned-up the motor for $150. If Brevard Corporation uses straight-line
depreciation, what annual depreciation will Brevard report for 2014?
$4,100.
$5,100.
$4,125.
$3,900.
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Multiple Choice Question 164
On July 1, 2014, Fleming Company sells machinery for $120,000. The machinery
originally cost $300,000, had an estimated 5-year life and an expected salvage
value of $50,000. The Accumulated Depreciation account had a balance of
$175,000 on January 1, 2014, using the straight-line method. The gain or loss on
disposal is
$20,000 gain.
$5,000 loss.
$10,000 loss.
$5,000 gain.
Multiple Choice Question 180
On July 1, 2014, Linden Company purchased the copyright to Norman Computer
Tutorials for $140,000. It is estimated that the copyright will have a useful life of 5
years. The amount of Amortization Expense recognized for the year 2014 would
be
$14,000.
$25,900.
$28,000.
$13,125.