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5 Lyie Inc. purchased certain plant assets under a deferred payment contract on December 31, 2018. The agreement was to pay $20,000 at the time of purchase and $20,000 at the end of each of the next 5 years. The plant assets should be valued at: Present value of a $20,000 ordinary annuity for 5 years $120,000 c. $120,000 minus imputed interest d. $120,000 plus imputed interest 6 Ashton Company exchanged a nonmonetary asset with a cost of $30,000 and accumulated depreciation of $16,000 for another nonmonetary asset worth $12,000. Ashton received $1,400 cash In the entry to record this exchange, Ashton should record a: a. $2,000 gain $2,000 loss $600 gain $600 loss b. 7. The following expenditures were among those incurred by Jensen Corporation during the current year. Replacement of tiles on portion of roof that had been leaking Overhaul of machinery that is expected to extend its useful life for another 2 years 6,000 $4,000 How much should be charged to repairs and maintenance in the current year a. b. $4,000 $6,000 C. $10,000 8. When a company replaces an old asphalt roof on its plant with a new fiberglass insulated roof, which of the following types of expenditure occurs? coposh ordinary repair a. b. addition rearrangement maintenance d. improvement C. HEET 641 Yuki Yogurt Company decided to replace its obsolete refrigeration system with a more efficient one. The old system had a book value of $9,000 and a fair value of $1,000 Yuki's new refrigeration system has a fair value of $190,000, for which Yuki paid $189,000 after permitting the contractor to keep the old refrigeration equipment How much should Yuki capitalize as the cost of the new refrigeration system? $189,000 $190,000 $197,000 a. b. с. $198,000 d. 10. A method that excludes residual value from the depreciation base for the calculation of depreciation is a straight-line b. sum-ofOthe-years' digits c. double-declining-balance d. activity

5 Lyie Inc. purchased certain plant assets under a deferred payment contract on December 31, 2018. The agreement was to pay $20,000 at the time of purchase and $20,000 at the end of each of the next 5 years. The plant assets should be valued at: Present value of a $20,000 ordinary annuity for 5 years $120,000 c. $120,000 minus imputed interest d. $120,000 plus imputed interest 6 Ashton Company exchanged a nonmonetary asset with a cost of $30,000 and accumulated depreciation of $16,000 for another nonmonetary asset worth $12,000. Ashton received $1,400 cash In the entry to record this exchange, Ashton should record a: a. $2,000 gain $2,000 loss $600 gain $600 loss b. 7. The following expenditures were among those incurred by Jensen Corporation during the current year. Replacement of tiles on portion of roof that had been leaking Overhaul of machinery that is expected to extend its useful life for another 2 years 6,000 $4,000 How much should be charged to repairs and maintenance in the current year a. b. $4,000 $6,000 C. $10,000 8. When a company replaces an old asphalt roof on its plant with a new fiberglass insulated roof, which of the following types of expenditure occurs? coposh ordinary repair a. b. addition rearrangement maintenance d. improvement C. HEET 641 Yuki Yogurt Company decided to replace its obsolete refrigeration system with a more efficient one. The old system had a book value of $9,000 and a fair value of $1,000 Yuki's new refrigeration system has a fair value of $190,000, for which Yuki paid $189,000 after permitting the contractor to keep the old refrigeration equipment How much should Yuki capitalize as the cost of the new refrigeration system? $189,000 $190,000 $197,000 a. b. с. $198,000 d. 10. A method that excludes residual value from the depreciation base for the calculation of depreciation is a straight-line b. sum-ofOthe-years' digits c. double-declining-balance d. activity

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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5 Lyie Inc. purchased certain plant assets under a deferred payment contract on December 31, 2018. The agreement was to pay $20,000 at the time of purchase and $20,000 at the end of each of the next 5 years. The plant assets should be valued at: Present value of a $20,000 ordinary annuity for 5 years $120,000 c. $120,000 minus imputed interest d. $120,000 plus imputed interest 6 Ashton Company exchanged a nonmonetary asset with a cost of $30,000 and accumulated depreciation of $16,000 for another nonmonetary asset worth $12,000. Ashton received $1,400 cash In the entry to record this exchange, Ashton should record a: a. $2,000 gain $2,000 loss $600 gain $600 loss b. 7. The following expenditures were among those incurred by Jensen Corporation during the current year. Replacement of tiles on portion of roof that had been leaking Overhaul of machinery that is expected to extend its useful life for another 2 years 6,000 $4,000 How much should be charged to repairs and maintenance in the current year a. b. $4,000 $6,000 C. $10,000 8. When a company replaces an old asphalt roof on its plant with a new fiberglass insulated roof, which of the following types of expenditure occurs? coposh ordinary repair a. b. addition rearrangement maintenance d. improvement C. HEET 641 Yuki Yogurt Company decided to replace its obsolete refrigeration system with a more efficient one. The old system had a book value of $9,000 and a fair value of $1,000 Yuki's new refrigeration system has a fair value of $190,000, for which Yuki paid $189,000 after permitting the contractor to keep the old refrigeration equipment How much should Yuki capitalize as the cost of the new refrigeration system? $189,000 $190,000 $197,000 a. b. с. $198,000 d. 10. A method that excludes residual value from the depreciation base for the calculation of depreciation is a straight-line b. sum-ofOthe-years' digits c. double-declining-balance d. activity
Transcribed Image Text:5 Lyie Inc. purchased certain plant assets under a deferred payment contract on December 31, 2018. The agreement was to pay $20,000 at the time of purchase and $20,000 at the end of each of the next 5 years. The plant assets should be valued at: Present value of a $20,000 ordinary annuity for 5 years $120,000 c. $120,000 minus imputed interest d. $120,000 plus imputed interest 6 Ashton Company exchanged a nonmonetary asset with a cost of $30,000 and accumulated depreciation of $16,000 for another nonmonetary asset worth $12,000. Ashton received $1,400 cash In the entry to record this exchange, Ashton should record a: a. $2,000 gain $2,000 loss $600 gain $600 loss b. 7. The following expenditures were among those incurred by Jensen Corporation during the current year. Replacement of tiles on portion of roof that had been leaking Overhaul of machinery that is expected to extend its useful life for another 2 years 6,000 $4,000 How much should be charged to repairs and maintenance in the current year a. b. $4,000 $6,000 C. $10,000 8. When a company replaces an old asphalt roof on its plant with a new fiberglass insulated roof, which of the following types of expenditure occurs? coposh ordinary repair a. b. addition rearrangement maintenance d. improvement C. HEET 641 Yuki Yogurt Company decided to replace its obsolete refrigeration system with a more efficient one. The old system had a book value of $9,000 and a fair value of $1,000 Yuki's new refrigeration system has a fair value of $190,000, for which Yuki paid $189,000 after permitting the contractor to keep the old refrigeration equipment How much should Yuki capitalize as the cost of the new refrigeration system? $189,000 $190,000 $197,000 a. b. с. $198,000 d. 10. A method that excludes residual value from the depreciation base for the calculation of depreciation is a straight-line b. sum-ofOthe-years' digits c. double-declining-balance d. activity
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