Fundamental Accounting Principles Volume 2 17th Edition By Kermit D. Larson test bank

      
       A) $5,920.   
       B) $7,400.
       C) $8,200.
       D) $6,560.
       E) $9,000.
      






233)       Phoenix Agency leases office space. On January 3, Phoenix incurs $88,200 to improve the leased office space. These improvements are expected to yield benefits for 9 years. Phoenix has 7 years remaining on its lease. Compute the amount of amortization expense that should be recorded the first year related to the improvements.



      
       A) $12,600. 
       B) $16,900.
       C) $19,700.
       D) $7,100.
       E) $9,800.
      






234)       Crestfield leases office space. On January 3, the company incurs $15,000 to improve the leased office space. These improvements are expected to yield benefits for 10 years. Crestfield has 5 years remaining on its lease. What journal entry would be needed to record the expense for the first year related to the improvements?



      
       A) Debit Amortization Expense—Leasehold Improvements $1,500; credit Accumulated Amortization—Leasehold Improvements $1,500.   
       B) Debit Depletion Expense $3,000; credit Accumulated Depletion $3,000.
       C) Debit Depreciation Expense $1,500; credit Accumulated Depreciation $1,500.
       D) Debit Depletion Expense $15,000; credit Accumulated Depletion $15,000.
       E) Debit Amortization Expense—Leasehold Improvements $3,000; credit Accumulated Amortization—Leasehold Improvements $3,000.
      






235)       Nike owns equipment that cost $100,100 with accumulated depreciation of $68,400. Nike asks $36,650 for the equipment but sells the equipment for $34,100. Compute the amount of gain or loss on the sale.



      
       A) $4,950 loss.  
       B) $4,950 gain.
       C) $2,400 gain.
       D) $2,550 gain.
       E) $2,400 loss.
      






236)       Gaston owns equipment that cost $32,000 with accumulated depreciation of $25,600. Gaston sells the equipment for $5,800. Which of the following would not be part of the journal entry to record the disposal of the equipment?



      
       A) Debit Accumulated Depreciation $25,600.   
       B) Credit Equipment $32,000.
       C) Debit Loss on Disposal of Equipment $600.
       D) Credit Gain on Disposal of Equipment $600.
       E) Debit Cash $5,800.
      






237)       Riverboat Adventures pays $480,000 plus $10,000 in closing costs to purchase real estate. The real estate consists of land appraised at $51,000, a building appraised at $209,100, and land improvements appraised at $249,900. Compute the cost that should be allocated to the building.



      
       A) $200,900.      
       B) $196,800.
       C) $209,100.
       D) $303,359.
       E) $106,641.
      






238)       Mohr Company purchases a machine at the beginning of the year at a cost of $34,000. The machine is depreciated using the straight-line method. The machine’s useful life is estimated to be 8 years with a $4,000 salvage value. Depreciation expense in year 2 is: