1.The balance of allowance for doubtful accounts prior to making the adjustment entry to record estimated uncollectible accounts
a)is relevant when using the percentage of receivable basis
b) is relevant when using the percentage of sales basis
c) is relevant to both bases of adjusting for uncollectible accounts
d)will never show a debit balance at this stage in the accounting cycle
2. the maturity value of a ,000, 7%, 2 month notes receivable
a),023
b),014
c),000
d),140
3. intangible assets don’t include
a)good will
b)patents
c)copyrights
d)plant and equipment
4. a gain or loss on disposal of a capital asset is determined by comparing the
a)replacement cost of the asset with the assets original cost
b)netbook value of the asset with the assets original cost
c)original cost of the asset with the proceeds received from its sale
d)net book value of the asset with the proceeds received from its sales
5)on july 1,2006 lars kennels sells equipment for ,000. The equipment originally cost ,000, had an estimated 5 yr life and expeted residual value of 10,000. The accumulated amortization account had a balance of 35,000 on January 1 2006, using the straight line method. The gain or loss on disposal is:
a)3,000 gain B)2,000 loss
C)3,000 loss
D)2,000 gain
6)The receivables turnover is a useful measure for assessing a companys
A)Sales revenue
B)efficiency in converting credit sales into cash
C)ability to pay debts
D)bad debts
7)if a capital asset is retired before its fully amortized and the residual value is received is less then the assets book value
a)a gain on disposal occurs
b)a loss on disposal occurs
C)there is no gain or loss on disposal
d)additional amortization expence must be recorded
8)the carter clinic purchased a new surgical laser for 72,000. The estimated residual value is ,000. The laser has a useful life of 6 yrs and the clinic expects to use it 10,000 hours. It was used 1,600 hours in yr 1; 2,100 in yr 2; 2,400 hrs in yr 3; 1,400 hrs in yr 4; 2,000 hrs in yr 5, 500 hrs in yr 6
Calculate the annual amortization for each of the 6 yrs under each of the following methods:
Straight line and units of activity
If you were the administrator of the clinic, which method would you use why?
Which methods would result in the lowest reported income in the first year?which method would result in the lowest total repoted income over the 6th year period?
Allied company sold a delivery truck for ,600. The delivery truck originally cost ,000 in 2001 and ,000 was spent on major overhaul in 2004. Accumulated amortization on the delivery truck at the date of disposal was ,800.
Prepare the journal entry to record the disposition of the delivery truck.
Lumber company invests million in a tract of timber land. It is estimated to have 18 million units of timber, a 0,000 residual value, and ,500,000 of site restoration costs
In the first year 50,000 units of timber are cut and sold.
Calculate the amortization cost per unit.
Prepare the correct journal entry to account for the depletion of the timber land for year 1