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Which amortization method uses the current book value in determining amortization? A) St

Which amortization method uses the current book value in determining amortization? A) St

 Which amortization method uses the current book value in determining amortization?

A) Straight-line

B) MACRS

C) Units-of-production

D) Double-declining balance.

12) The amortization method that allocates amortization of a plant asset based on the number of units produced is the:

A) straight-line method.

B) units-of-production method.

C) modified accelerated cost recovery method.

D) double-declining-balance method.

13) Josh Kindel purchased equipment for $60,000 plus GST at 5% on January 1, 2015. Its residual value is $4,000 with a useful life of 8 years. The amount of amortization for 2015 under the double-declining-balance method is

A) $14,000.

B) $ 7,500.

C) $ 7,000.

D) $15,000.

14) Josh Kindel purchased equipment for $60,000 plus GST at 5% on January 1, 2015. Its residual value is $4,000 with a useful life of 8 years. The amount of amortization for 2016 under the double-declining-balance method is

A) $22,500.

B) $11,250.

C) $10,500.

D) $21,000.

15) Lacy purchased equipment for $77,000 plus HST at 13% on January 1. Its residual value is $5,000 with a useful life of 9 years. The amount of amortization in the first year under the straight-line method is

A) $8,556.

B) $8,000.

C) $16,940.

D) $15,840.

16) Jason Moore purchased computer equipment for $2,800 plus HST at 13% on January 1, 2014. It has a residual value of $400 with a useful life of 4 years. After the appropriate adjusting entries have been made, the balance in Accumulated Amortization account for this asset on January 1, 2016, under the straight-line method, should be

A) $1,200.

B) $600.

C) $700.

D) $1,400.

17) J. Long purchased computer equipment for $5,000 plus HST at 13% on January 1, 2014. It has a residual value of $500 with a useful life of 5 years. After the appropriate adjusting entries are made, the book value of the asset on December 31, 2014, under the double-declining-method, is

A) $1,800.

B) $3,390.

C) $3,000.

D) $4,100.

18) J. Long purchased computer equipment for $5,000 plus HST at 13% on January 1, 2014. It has a residual value of $500 with a useful life of 5 years. After the appropriate adjusting entries are made, the book value of the asset on December 31, 2015, under the double-declining-method, is

A) $1,800.

B) $2,034.

C) $1,620.

D) $1,831.

19) Straight-line amortization is used in the first year when double-declining-balance should be used. This error would cause

A) the period's net income to be overstated.

B) the period's net income to be understated.

C) the period end assets to be understated.

D) None of these are correct.

20) What would the amortization be in year 3 for a computer system using the straight-line method when cost is $5,000 plus HST at 13%, residual value is $1,000, and the expected life is 4 years?

A) $2,000

B) $1,500

C) $1,250

D) $1,000

Tripti 07-Dec-2019

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