Hastings Company has purchased a group of assets for $15,000 Answer
Hastings Company has purchased a group of assets for $15,000
Week 4 Homework, Ch 10-13
1) Which of the following should be included in the cost of land?
a) cost to build sidewalks on the land
b) cost to clear the land of old buildings
c) cost of installing signage
d) cost of installing fences
2) Which of the following items should be amortized?
a) natural resources
c) patents, copyrights, trademarks
d) tangible property, plant, and equipment, other than land
3) Maple Company had net sales of $200,550 for the year ended December 31, 2015. Its beginning and ending total assets were $75,200 and $110,500, respectively. Determine Maple’s asset turnover ratio for the year ended December 31, 2015.
a) 0.46 times
b) 2.67 times
c) 1.18 times
d) 2.16 times
4) Which of the following is true of dividends?
a) Dividends are a distribution of cash, stock, or other assets to the stockholders.
b) Dividends increase assets and decrease total stockholders’ equity of a corporation.
c) Dividend payments decrease paid-in capital.
d) Dividend payments increase stockholders’ equity.
5) Which of the following is true of preferred stock?
a) Preferred shareholders generally receive a fixed amount of dividends before common stockholders do.
b) Preferred shareholders are guaranteed that they will not take a loss on their investment.
c) Preferred shareholders have higher voting rights than common shareholders.
d) Preferred shareholders may sell their shares for a price higher than that of common stock.
6) Hastings Company has purchased a group of assets for $15,000. The assets and their relative market values are listed below.
Which of the following amounts would be debited to the Land account?
1) 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 the depreciation expense for 2015 and 2016 if the company uses the double-declining-balance method of depreciation? (Do not round your intermediate calculations.)
2) On January 1, 2015, Anodel Inc. acquired a machine for $1,000,000. The estimated useful life of the asset is 5 years. Residual value at the end of 5 years is estimated to be $50,000. Calculate the depreciation expense per year using the straight-line method.
3) Black n White Company purchased equipment for $45,000. The company recorded total depreciation of $36,000 on the equipment. On January 1, 2015, Black n White traded in the equipment for new equipment, paying $54,000 cash. The fair market value of the new equipment is $65,000. Journalize the company’s exchange of equipment. Assume the exchange had commercial substance.
4) On October 1, 2015, Nurix Company purchased a patent for $200,000 cash. Although the patent gives legal protection for 20 years, the patent is expected to be used for only 10 years. What will be the balance in the patent account on September 30, 2016?
5) Lerner Company had the following transactions in 2015, its first year of operations.
Issued 20,000 shares of common stock. Stock has par value of $1.00 per share and was issued at $14.00 per share.
Issued 1,000 shares of $100 par value preferred stock. Shares were issued at par.
Earned net income of $35,000.
Paid no dividends.
At the end of 2015, what is the total amount of stockholders’ equity?
6) Assume the following information for Petra Sales Company:
Common stock, $1.00 par, 200,000 issued, 180,000 outstanding
Paid-in capital in excess of Par—Common: $1,600,000
Retained earnings: $2,440,000
Treasury stock: 20,000 shares purchased at $12 per share
If Petra Sales purchases an additional 5,000 shares of treasury stock at $14 per share, what number of shares will be shown as issued and outstanding?
7) A company purchased a used machine for $10,000. The machine required installation costs of $1,000 and insurance while in transit of $500. At which of the following amounts would the machine be recorded?
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