Question

6. An asset is purchased for $11,000. It has an estimated residual value of $2,000 and an estimated useful life of six years. After two years of use, the estimated residual value is revised to $1,000. Assuming straight-line depreciation, depreciation expense in year three of use would be (if necessary, round your answer to the nearest whole dollar):

		a. $1,286
		b. $1,250
		c. $1,100
		d. $1,750

10. Additions and Betterments are charged (debited) to the asset's accumulated depreciation account.

		a. True
		b. False

12. Jones Co. borrows $30,000 from the bank at 9% interest on August 31. Jones' journal entry to record accrued interest on the note on September 30 would include (use a 365-day year):

		a. a debit to Interest Expense for $221.92
		b. a credit to Interest Revenue for $225.00
		c. a debit to interest Receivable for $225.00
		d. a debit to Interest Payable for $221.92

20. An investment earning 12% interest compounded semi-annually, will accumulate to a greater amount in the future than an equal investment earning 12% compounded quarterly (assume that the two alternatives would be invested for the same amount of time).

		a. True
		b. False

Answer 1