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

      






59)  A depreciation method that produces larger depreciation charges during the early years of an asset's life and smaller charges in the later years is

      
       A) Accelerated depreciation  
       B) Book value depreciation
       C) Straight-line depreciation
       D) Units-of-production depreciation
       E) Capital cost allowance
      






60)  CamCo Ltd. leased a floor space in a new office building. Rent will cost $10,000 per month for a ten-year lease, but some renovations are needed and will be paid by CamCo to customize the space. The renovations include installing walls to create a new office and boardroom (cost $8,000), new flooring (cost $5,800), painting (cost $1,500) and updated wiring to accommodate computer servers (cost $8,700). How should these costs be handled for accounting purposes by CamCo?

      
       A) Painting costs should be charged to rent expense and the other costs should be capitalized to leasehold improvements
       B) They should all be capitalized as leasehold improvements
       C) They should all be charged to rent expense
       D) They should be capitalized as development costs
       E) Painting costs should be capitalized to leasehold improvements and other costs should be charged to rent expense
      






61)  Intangible assets do not include

      
       A) Patents   
       B) Copyrights
       C) Trademarks
       D) Goodwill
       E) Leaseholds
      






62)  The relevant factor(s) in calculating depreciation is(are)

      
       A) Cost
       B) Residual value
       C) Useful life
       D) Both cost and useful life
       E) All of these
      






63)  August Co. bought land for a warehouse for $70,000. This land contains an old garage that is removed at a cost of $5,000. Closing costs include legal fees of $1,000 and brokerage fees of $ 2,000. The cost of the land will be

      
       A) $70,000  
       B) $78,000
       C) $75,000
       D) $76,000
       E) $73,000
      






64)  June Co. bought land for a retail store for $80,000. This land contains an old structure that is removed at a cost of $10,000.
 June Co. spends $10,000 for a parking lot and $3,000 for fencing around the property.
 Which of the following is correct?

      
       A) The cost of the land is $90,000 and the cost of the land improvements is $13,000      
       B) The cost of the land is $80,000 and the cost of the land improvements is $13,000.
       C) The cost of the land is $80,000 and the cost of the land improvements is $23,000
       D) The cost of the land is $80,000 and the cost of the land improvements is $10,000
       E) The cost of the land is $90,000 and the cost of the land improvements is $10,000
      






65)  July Enterprises purchased equipment on March 1, 2022, for $75,000. The company also paid the following amounts: $500 for freight charges; $2,100 to train employees to use the new equipment; and $2,800 for testing and installation. The equipment will be depreciated on a straight-line basis over 10 years. At December 31, 2022, July will have depreciation expense for the equipment in the amount of