Acc 213 Final Exam Questions

Topics: Depreciation, Generally Accepted Accounting Principles, Corporate tax Pages: 3 (654 words) Published: November 14, 2012
ACC 213 FINAL EXAM
1. Calculate the salvage value of a forklift purchased Jan 1, 2009 for $40,000, with a 7 year useful life, that uses straight line depreciation and has a annual depreciation of $5,000.

5,000= (40000 – X) / 7 (x or salvage value) = 5,000
Depreciation = (cost- salvage value)/ estimated useful life

2. On January 4, 2007, Bloomberg Company purchased new equipment for $204,000 that had a useful life of four years and a salvage value of $20,000. a. Prepare a schedule showing the annual depreciation and end-of-year accumulated depreciation for the first three years of the asset’s life under the: I. Straight-line method

Year 1 158,000 (-46,000)
Year 2 112,000 (-46,000)
Year 3 66,000 (-46,000)
II. Sum-of-the-years digits method
Year 1 122,400 (-81,600)
Year 2 85,680 (-36,720)
Year 3 68,544 (-17,136)
III. Double- declining- balance method
Year 1 122,400 (-81,600)
Year 2 73,440 (-48,960)
Year 3 44,064 (-29,376)

b. If the sum of the year’s digits method is used to compute depreciation, what would be the book value of the asset at the end of 2008. $122,400

3. Blake Kredell owns and operates a retail business called Blake’s Camera Shop. His postclosing trial balance on December 31, 2006, is provided below. Blake plans to enter into partnership with Carmen Santos, effective January 1, 2007. Profits and losses will be shared equally. Blake will transfer all assets and liabilities of his store to the partnership, after revaluation. Santos will invest cash equal to Blake’s investment after revolution. The agreed values are: Accounts Receivable (net), $7,500; Merchandise Inventory, $27,000; and Store Equipment, $8,000. The partnership will operate under the name. Picture Perfect. Record each partner’s investment on page. 1 of a general journal. Omit descriptions.

BLAKE’S CAMERA SHOP
Postclosing Trail Balance
December...
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