Since 2001, TSAY Steel has replaced all its major manufacturing equipment and now has the following equipment recorded in the appropriate accounts. TSAY uses a calendar year as its fiscal year.
A forge purchased January 1, 2000, for $100,000. Ordinary and necessary installation costs were $20,000, and the forge has an estimated 5-year life with a salvage value of $10,000.
A grinding machine costing $45,000 purchased January 1, 2002. The machine has an estimated 5-year life with a salvage value of $5,000.
A lathe purchased January 1, 2004 for $60,000. The lathe has an estimated 5-year life and a salvage value of $7,000.
Using the straight-line depreciation method, TSAY's 2004 depreciation expense is:
a. $45,000
b. $40,334
c. $40,600
d. $40,848
Answer: C
Accounting
- Per U.S. GAAP, which of the following statements is correct regarding accounting changes that result in financial statements that are, in effect, the statements of a different reporting entity?
- Under U.S. GAAP, a transaction that is unusual in nature and infrequent in occurrence should be reported separately as a component of income:
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- In open market transactions , Gold Corp. simultaneously sold its long-term investment in Iron Corp. bonds and purchased its own outstanding bonds. The broker remitted the net cash from the two transactions. Gold's gain on the purchase of its own bonds exceeded its loss on the sale of the Iron bonds. Assume the transaction to purchase its own outstanding bonds is unusual in nature and has occurred infrequently. Under U.S. GAAP , Gold should report the:
- On April 30, Deer Corp. approved a plan to dispose of a component of its business. For the period January 1 through April 30, the component had revenues of $500,000 and expenses of $800,000. The assets of the component were sold on October 15 at a loss. In its income statement for the year ended December 31, how should Deer report the component's operations from January 1 to April 30?
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- How should the effect of a change in accounting principle that is inseparable from the effect of a change in accounting estimate be reported?
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- Scott Corporation sold a fixed asset used for operations for greater than its carrying amount. Scott should report the transaction in the income statement using the:
- According to the IASS conceptual framework, which of the following is an underlying assumption of financial statement preparation and presentation?
- According to the IASB conceptual framework, the usefulness of providing information in the financial statements is subject to the constraint of:
- Which of the following is not defined in FASB Statement of Financial Accounting Concepts Number 7 as one of the five elements of present value (or economic value) measurement used to establish the value of assets or liabilities using cash flow information?
- According to the FASB conceptual framework, which of the following relates to both relevance and reliability?
- According to the FASB conceptual framework, which of the following statements conforms to the realization concept?
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- Which payroll taxes is withheld from an employee's paycheck?
- True or False? - Interest Rates are generally expressed as annual Rates ( over 12 months)
- True or False? - If you Issue a bond at a premium, you receive more than face value
- What is the formula to calculate basic interest?
- Due to the importance of earnings per share information, it is required to be reported by all Public Companies Nonpublic Companies
- What effect will the acquisition of treasury stock have on stockholders' equity and earnings per share, respectively?
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