Question

1.	The Whatever Corp. purchased equipment on March 1, 2013 as follows:
	Equipment Cost				$260,000
	Shipping costs				$10,000
	Estimated Salvage Value				$25,000
	Estimated Useful Life				10
	Life time units of Production				1,000,000
	If the Straight line method is used, (a) what is the depreciation expense as of December 31, 2013?
	(b) What will be the Depreciation expense for the calendar year 2014?
2.	If the Whatever Corp. uses the Double Declining Balance Method, what would the depreciation expense be
	for the second year (2014) ?
3.	If the Whatever Corp. uses the Units of Production method, what is the depreciation cost per unit?
	Calculate to three decimal places
4.	If the Whatever Corp. uses the Units of Production method, and they manufactured and sold 400,000 units as of
	December 31, 2013, what would be the amount of Depreciation Expense that should be recognized for 2013?
5.	What is the book value of the equipment on January 1, 2014 using the information from (4) above?
6.	What is the book value of an asset equal too at the end of it's useful life?
	A	It's total cost including freight, assembly and other direct costs incurred
	B	It's Salvage Value
	C	It's purchase price
	D	Zero
7.	The B.S. Law Firm purchased new computers on January 1, 2011 for a total cost
	of $30,000. The computers have a useful life of 3 years and no salvage value. The straight line
	depreciation method is used. If on January 1, 2013 it is determined that the computers will
	be able to be sold for $500 at the end of their useful lives, what would be the depreciation expense
	recognized in 2013?
8.	The WTR company has a truck that was totalled when a flock of herons ran across the road and the driver slammed on
	the breaks and skidded into a farmers field and hit two cows and a turkey. They need to buy a new truck. The dealer
	will give them a $1,000 trade in value on the totalled truck if they agree to clean the turkey feathers out of the grill.
	They choose to buy a new truck which has a sticker price of $52,000. They pay $20,000 in cash and take out a note for the
	remaining amount they owe. The totalled truck was originally purchased for $32,000 and has accumulated depreciation
	of $30,000. Answer the following questions about this situation. BTW: The turkey lived… for now! Turkey's useful life ends November 28, 2013
	a) What is the gain or loss on the trade-in of the totalled truck?
	b) What is the $ amount of the Note Payable?
	c) What is the $ amount the new truck will be recorded at?
	d) Produce the journal entry to record this transation
9.	The Curl up & Dye Hair Salon has died. It must liquidate it's assets. It has a building it must sell that originally cost $150,000.
	As of the sale date, the accumulated depreciation account had a balance of $40,000. The Luna Sea Tanning Salon agrees to buy
	the building for $310,000 CASH!!!!! Produce the journal entry to record this transaction for Curl Up & Dye.
10.	The Jurassic Pork company has just bought a tract of land on which they plan to raise their pigs. While they were digging
	a foundation for their new barn, they struck oil. So they sold the pigs and prepared to drill for oil. The land cost them
	$700,000 and will be worth $300,000 when they are done with it. They expect to produce 1,000,000 barrels of oil over the life of
	this project. If in the first year they drill and sell 200,000 barrels of oil, what amount of depletion expense will they record?

Answer 1