Question

14A. Martin Company purchases a machine at the beginning of the year at a cost of $135,000. The machine is depreciated using the double-declining-balance method. The machine’s useful life is estimated to be 4 years with a $11,250 salvage value. Depreciation expense in year 4 is:

14B. On January 1 of Year 1, Congo Express Airways issued $4,400,000 of 7%, bonds that pay interest semiannually on January 1 and July 1. The bond issue price is $3,994,000 and the market rate of interest for similar bonds is 8%. The bond premium or discount is being amortized using the straight-line method at a rate of $14,500 every 6 months. The life of these bonds is:

Answer #1

14 A) | Rate= 1/4*2 | |||||

0.5 | ||||||

50% | ||||||

Depreciation expense | ||||||

year 1 | 135000*50%= | 67500 | ||||

year 2 | (135000-67500)*50% | 33750 | ||||

year 3 | (67500-33750)*50%= | 16875 | ||||

year 4 | (16875-11250)= | 5625 | answer | |||

Depreciation for year 4 is $5,625 | ||||||

14 B) | total discount | |||||

Face value | 44,00,000 | |||||

less issue price | 39,94,000 | |||||

total discount | 4,06,000 | |||||

discount period= | 406,000/14500 | |||||

28 | ||||||

hence life of these bonds is 14 years | ||||||

Martin Company purchases a machine at the beginning of the year
at a cost of $126,000. The machine is depreciated using the
double-declining-balance method. The machine’s useful life is
estimated to be 4 years with a $10,500 salvage value. The machine’s
book value at the end of year 3 is:

Martin Company purchases a machine at the beginning of the year
at a cost of $85,000. The machine is depreciated using the
double-declining-balance method. The machine’s useful life is
estimated to be 4 years with a $7,000 salvage value. The machine’s
book value at the end of year 3 is:
$42,500.
$63,750.
$74,375.
$10,625.
$9,719.

Martin Company purchases a machine at the beginning of the year
at a cost of $140,000. The machine is depreciated using the
double-declining-balance method. The machine’s useful life is
estimated to be 4 years with a $11,600 salvage value. The machine’s
book value at the end of year 3 is:
Multiple Choice
a. $70,000.
b. $105,000.
c. $122,500.
d. $17,500.
e. $16,025.

On January 1 of Year 1, Congo Express Airways issued $3,800,000
of 7%, bonds that pay interest semiannually on January 1 and July
1. The bond issue price is $3,432,000 and the market rate of
interest for similar bonds is 8%. The bond premium or discount is
being amortized using the straight-line method at a rate of $11,500
every 6 months. The life of these bonds is:
Multiple Choice
30 years
16 years.
32 years.
11 years.
33 years.

On January 1 of Year 1, Congo Express Airways issued $4,900,000
of 7%, bonds that pay interest semiannually on January 1 and July
1. The bond issue price is $4,463,000 and the market rate of
interest for similar bonds is 8%. The bond premium or discount is
being amortized using the straight-line method at a rate of $11,500
every 6 months. The life of these bonds is:
A. 39 years
B. 19 years
C. 43 years
D. 38 years
E....

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a cost of $39,000. The machine is depreciated using the
straight-line method. The machine’s useful life is estimated to be
5 years with a $5,000 salvage value. The book value of the machine
at the end of year 2 is

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a cost of $27,000. The machine is depreciated using the
straight-line method. The machine’s useful life is estimated to be
8 years with a $5,000 salvage value. The book value of the machine
at the end of year 2 is:

Martin
Company purchases a machine at the beginning of the year at a cost
of $60,000, . The machine is depreciated using the straight line
methodThe machine's useful is estimated to be 4 years with a $5,000
salvage valueThe book value of the machine at the end of year
4

Mohr company purchases a machine at the beginning of
the year at a cost of $47,000. the machine is depreciated using the
double declining balance method. the machine's useful is life
estimate by 5 years with 7,000 salvage value. depreciation expense
in years 2 is

On January 1 of Year 1, Congo Express Airways issued $2,500,000
of 5% bonds that pay interest semiannually on January 1 and July 1.
The bond issue price is $2,260,000 and the market rate of interest
for similar bonds is 6%. The bond premium or discount is being
amortized at a rate of $8,000 every six months. After accruing
interest at year end, the company's December 31, Year 1 balance
sheet should reflect total liabilities associated with the bond
issue...

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