Question

Question 21

In 2012, MegaStores reported net income of $5.7 billion, net sales of $164.7 billion, and average total assets of $61.0 billion. What is MegaStores' asset turnover ratio?

Question 21 options:

	A.   0.37 times
	B.    0.09 times
	C.    2.7 times
	D.   10.7 times

Question 22

On January 2, 2012, York Corp. replaced its boiler with a more efficient one. The following information was available on that date:

Purchase price of new boiler	$170,000
Carrying amount of old boiler	$10,000
Fair value of old boiler	$4,000
Installation cost of new boiler	$20,000

The old boiler was sold for $4,000. What amount should York capitalize as the cost of the new boiler?

Question 22 options:

	A.   $190,000
	B.    $186,000
	C.    $180,000
	D.   $170,000

Question 23

Matile Co. purchased machinery that was installed and ready for use on January 3, 2012, at a total cost of $115,000. Salvage value was estimated at $15,000. The machinery will be depreciated over five years using the double-declining balance method. For the year 2013, Matile should record depreciation expense on this machinery of ______________.

Question 23 options:

	A.   $24,000
	B.    $27,600
	C.    $30,000
	D.   $46,000

Question 24

On February 1, 2012, Nelson Corporation purchased a parcel of land as a factory site for $250,000. An old building on the property was demolished, and construction began on a new building which was completed on November 1, 2012. Costs incurred during this period are listed below:

Demolition of old building	$20,000
Architect's fees	$35,000
Legal fees for title investigation and purchase contract	$5,000
Construction costs	$1,290,000

(Salvaged materials resulting from demolition were sold for $10,000.)
Nelson should record the cost of the land and new building, respectively, as ________________.

Question 24 options:

	A.   $275,000 and $1,315,000
	B.    $260,000 and $1,330,000
	C.    $260,000 and $1,325,000
	D.   $265,000 and $1,325,000

Question 25

On January 1, 2012, Graham Company purchased a new machine for $2,800,000. The new machine has an estimated useful life of nine years and the salvage value was estimated to be $100,000. Depreciation was computed on the sum-of-the-years'-digits method. What amount should be shown in Graham's balance sheet at December 31, 2013, net of accumulated depreciation, for this machine?

Question 25 options:

	A.   $2,260,000
	B.    $1,780,000
	C.    $1,742,221
	D.   $1,659,000

Answer 1