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

      
       A) $10,000  
       B) $40,000
       C) $47,000
       D) $50,000
       E) $53,000
      






15)  When originally purchased, a vehicle had a cost of $23,000, with an estimated residual value of $1,500. The estimated useful life is 8 years. After 4 years of straight-line depreciation, the estimated useful life was revised from 8 to 6 years, but with zero residual value. The depreciation expense in year 5 should be

      
       A) $5,543.75      
       B) $2.687.50
       C) $6,125.00
       D) $10,750.00
       E) $2,856.25
      






16)  SportsWorld discarded a display case it had purchased for $8,000. $7,200 in accumulated depreciation had been recorded to the date of sale. SportsWorld should recognize a gain or loss on disposal of

      
       A) $0    
       B) $800 loss
       C) $800 gain
       D) $8,000 loss
       E) $7,200 loss
      






17)  On April 3, 2022, Rainbow Studios purchased a patent for $56,000. Its remaining legal life is 7 years. Rainbow Studios estimates that the patent will be useful for another 4 years. The correct adjusting entry to record amortization of the patent on December 31, 2022 is


A)

Amortization Expense, Patent
14,000
 

Accumulated Amortization, Patent
 
14,000

B)

Amortization Expense, Patent
8,000
 

Accumulated Amortization, Patent
 
8,000

C)

Amortization Expense, Patent
10,500
 

Accumulated Amortization, Patent
 
10,500

D)

Amortization Expense, Patent
6,000
 

Accumulated Amortization, Patent
 
6,000

E)

Patent
10,500
 

Accumulated Amortization, Patent
 
10,500





18)  A machine originally had an estimated service life of 5 years, and after 3 years, it was decided that the original estimate should have been for 10 years. The remaining cost to be depreciated should be allocated over the next

      
       A) 2 years   
       B) 5 years
       C) 6 years
       D) 7 years
       E) 10 years
      






19)  A change in accounting estimate is

      
       A) Reflected only in current and future financial statements 
       B) Reflected in current and future financial statements and also requires modification of past statements
       C) A change in a calculated amount used in the financial statements resulting from new information or subsequent developments and from better insight or improved judgment
       D) Reflected in both current and future financial statements, and a change in a calculated amount is used in the financial statements resulting from new information or subsequent developments and from better insight or improved judgment
       E) None of the choices are correct
      






20)  Creek Construction owned a bulldozer which was destroyed by fire. The bulldozer originally cost $38,000. The accumulated depreciation recorded to the date of loss was $20,000. The proceeds from the insurance company were $20,000. Creek Construction should recognize

      
       A) A loss of $2,000  
       B) An expense of $2,000
       C) A loss of $38,000