multiple choice and 1 page essay

Instructions

In this unit, you examine different types of liabilities. For this assignment, compose an essay that answers the following questions:

What are three main characteristics of liabilities, and why is it important to classify liabilities into short-term and long-term? Include examples of short and long-term liabilities in your response.

Your essay must be at least one page in length. Be sure to include an introduction that gives the purpose of your essay and engages the reader. You must use at least your textbook as a reference, but you may use other resources as needed. Any information from a resource must be cited and referenced in APA style, and your essay should be formatted in accordance with APA guidelines.

Multiple choice questions will be attached in word document but they are below as well

Question 1

Hawkeye Corporation has acquired a property that included both land and a building for $560,000. The corporation hired an appraiser who has determined that the market value of the land is $370,000 and that of the building is $400,000. At what amount should the corporation record the cost of land? (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.)

		$408,800
		$177,600
		$280,000
		$268,800

5 points

Question 2

Caterpillars, Inc., a manufacturing company, acquired equipment on January 1, 2014 for $530,000. Estimated useful life of the equipment was seven years and the estimated residual value was $13,000. On January 1, 2017, after using the equipment for three years, the total estimated useful life has been revised to nine total years. Residual value remains unchanged. The company uses the straight-line method of depreciation. Calculate depreciation expense for 2017. (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.)

		$50,476
		$49,238
		$58,889
		$57,444

5 points

Question 3

Danube Corp. purchased a used machine for $21,000. The machine required installation costs of $6,000 and insurance while in transit of $700. At which of the following amounts would the machine be recorded?

		$21,000
		$27,000
		$21,700
		$27,700

5 points

Question 4

On January 1, 2016, Martini, Inc. acquired a machine for $1,030,000. The estimated useful life of the asset is five years. Residual value at the end of five years is estimated to be $87,000. What is the book value of the machine at the end of 2017 if the company uses the straight-line method of depreciation?

		$618,000
		$652,800
		$565,800
		$617,996

5 points

Question 5

The cost of an asset is $1,160,000, and its residual value is $160,000. Estimated useful life of the asset is four years. Calculate depreciation for the first year using the double-declining-balance method of depreciation. (Do not round any intermediate calculations, and round your final answer to the nearest dollar.)

		$500,000
		$580,000
		$290,000
		$250,000

5 points

Question 6

On January 1, 2017, Zade Manufacturing Corporation purchased a machine for $40,900,000. Zade’s management expects to use the machine for 27,000 hours over the next six years. The estimated residual value of the machine at the end of the sixth year is $47,000. The machine was used for 3,900 hours in 2017 and 5,400 hours in 2018. What is the depreciation expense for 2017 if the corporation uses the units-of-production method of depreciation? (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.)

		$5,900,973
		$13,633,333
		$8,170,578
		$5,907,759

5 points

Question 7

Hastings Corporation has purchased a group of assets for $21,900. The assets and their relative market values are listed below.

Land	$6,800
Equipment	2,500
Building	3,100

Which of the following amounts would be debited to the Land account? (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.)

		$4,133
		$12,045
		$4,380
		$5,475

5 points

Question 8

Acer, Inc. plans to develop a shopping center. In the first quarter, the following amounts were spent:

Acquisition of land	$16,000
Surveys and legal fees	1,200
Land clearing	1,100
Fencing	7,000
Install lighting and signage	1,760

What amount should be recorded as the cost of the land in the corporation’s books?

		$25,300
		$18,300
		$20,060
		$24,100

5 points

Question 9

Radar, Inc. purchased a van on January 1, 2016, for $830,000. Estimated life of the van was five years, and its estimated residual value was $96,000. Radar uses the straight-line method of depreciation. At the beginning of 2018, the corporation revised the total estimated life of the asset from five years to six years. The estimated residual value remained the same as estimated earlier. Calculate the depreciation expense for 2018.

		$146,800
		$134,100
		$110,100
		$73,400

5 points

Question 10

Roberts Construction Group paid $11,000 for a plant asset that had a market value of $20,500. At which of the following amounts should the plant asset be recorded?

		$20,500
		$5,500
		$11,000
		$22,000

5 points

Question 11

IFRS permits the presentation of plant assets at their fair market value because __________.

		U. S. GAAP requires this presentation
		fair market value may be more relevant
		fair market value is easier to compute than book value
		financial statements users are indifferent to how plant assets are presented

5 points

Question 12

Which of the following depreciation methods allocates a higher amount of depreciation in earlier years than in later years?

		The units-of-production method
		The straight-line method
		The double-declining-balance method
		The first-in, first-out method

5 points

Question 13

A plant asset is fully depreciated when the book value is __________.

		greater than the residual value
		greater than the market value
		equal to the residual value
		equal to the market value

5 points

Question 14

Which of the following depreciation methods allocates a varying amount of depreciation each year based on an asset’s usage?

		The straight-line method
		The annuity method
		The units-of-production method
		The double-declining-balance method

5 points

Question 15

A company purchased a computer on July 1, 2017 for $50,000. Estimated useful life of the computer was five years, and it has no residual value. Which of the following methods should be used to best match its expense against the revenue it produces?

		The units-of-production method
		The straight-line method
		The double-declining-balance method
		The first-in, first-out method

5 points

Question 16

Which of the following is included in the cost of a plant asset?

		Amounts paid to make the asset ready for its intended use
		Regular repair and maintenance costs
		Replacement of damaged parts of the asset
		Wages of workers who work use the asset in normal operations

5 points

Question 17

The expected cash value of an asset at the end of its useful life is known as __________.

		book value
		residual value
		carrying value
		market value

5 points

Question 18

Which of the following requires businesses to record depreciation?

		Revenue recognition principle
		Matching principle
		Cost principle
		Going concern principle

5 points

Question 19

Which of the following is included in the cost of land?

		Cost of fencing
		Cost of paving
		Brokerage commission
		Cost of outdoor lighting

5 points

Question 20

Fred, Inc. owns a delivery truck. Which of the following costs associated with the truck will be capitalized and depreciated?

		Modification for new use
		Change of oil filters
		Replacement of tires
		Normal engine repair