Question

In: Accounting

Farmer Company sold a piece of equipment for $6,000. The equipment had an original cost of...

Farmer Company sold a piece of equipment for $6,000. The equipment had an original cost of $34,000 and accumulated depreciation of $31,000 at the time of the sale. Which of the following correctly shows the effect of the sale on the elements of the financial statements?

Assets = Liab. + Stk
Equity		 Rev./Gain − Exp. = Net Inc. Stmt of Cash Flow
A. 3,000 NA 3,000 3,000 NA 3,000 6,000 OA
B. (3,000) NA (3,000) NA 3,000 (3,000) 6,000 IA
C. 3,000 NA 3,000 3,000 NA 3,000 6,000 IA
D. 6,000 NA 6,000 6,000 NA 6,000 6,000 IA

Multiple Choice

  • Option A

  • Option B

  • Option C

  • Option D

On January 1, Year 1, Friedman Company purchased a truck that cost $49,000. The truck had an expected useful life of 8 years and an $9,000 salvage value. Friedman uses the double-declining-balance method. What is the book value of the truck at the end of Year 1? (Do not round intermediate calculations.)

Multiple Choice

  • $27,750

  • $36,750

  • $39,000

  • $30,000

Chico Company paid $670,000 for a basket purchase that included office furniture, a building and land. An appraiser provided the following estimates of the market values of the assets if they had been purchased separately: Office furniture, $195,000; Building, $570,000, and Land, $165,000. Based on this information, what is the cost that should be allocated to the office furniture? (Round your intermediate percentages to four decimal places: ie .054231 = 5.42%.)

Multiple Choice

  • $195,000

  • $140,499

  • $158,333

  • $52,500

On September 1, Year 1, West Company borrowed $52,000 from Valley Bank. West agreed to pay interest annually at the rate of 9% per year. The note issued by West carried an 18-month term. West Company has a calendar year-end. What is the amount of interest expense that will be reported on West's income statement for Year 1?

Multiple Choice

  • $0

  • $1,560

  • $468

  • $1,170

Solutions

Expert Solution

ekkarill92 answered 9 months ago
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