ACCT 2121 PAL Session 3/21: Chapter 8 and Chapter 9

BOBS Corporation sells equipment they originally purchased for $68,000. The total amount of accumulated depreciation on this equipment is $32,000. BOBS Corporation ends up selling the equipment for $39,000. Is there a gain or loss on disposal of PPE and by how much?

• $3,000 gain on PP&E

• $2,000 gain on PP&E

• $1,000 loss on PP&E

• $2,000 loss on PP&E

Johnson Inc. purchased equipment for $14,000 on January 1st, 2020. They also paid freight charges of $6,000 and installation costs of $8,000. They estimate that they will be able to sell it for $4,000 at the end of its 6 year useful life. What would the amount of accumulated depreciation be on December 31st, 2022.

• $8,000

• $12,000

• $15,000

• &16,000

Harvey Company purchased a machine on April 30th, 2020 for $12,500 dollars. They paid freight costs of $2,500 and installation costs of $3,000. Harvey company estimates that they can sell it for $2,000 at the end of its 5 year useful life. What is the amount of depreciation on December 31st, 2020?

• $2,420.25

• $1,980.89

• $1,1667.67

• $2,133.33

Monsen company decides to sell a piece of equipment for $17,000. The piece of equipment originally cost them $34,000 and has accumulated a total depreciation of $19,000. Did they get a gain or loss on PPE and by how much?

• $1,000 loss

• $2,000 loss

• $1,000 gain

• $2,000 gain

On January 1st, 2019, BOBS corporation purchased for a vehicle for $28,000. They expect the car to last 5 years and be sold for $5,000 at the end of it’s useful life. What would be the amount of accumulated depreciation on December 31st, 2020, using the straight line method?

• $9,200

• $4,600

• $10,800

• $5,400

Equipment was purchased for $19,000 on January 1st, 2020. Freight costs were $5,000 and installation costs were $9,000. The estimated salvage value at the end of it’s 5-year useful life is $4,000. What is the amount of accumulated depreciation on the equipment on December 31st, 2022, using the straight line method?

• $12,900

• $17,400

• $18,200

• $15,500

Which of the following is an example of land improvements?

• Purchasing land

• Painting a fence on company property

• Installing a parking lot onto company property

Which of the following cannot be considered a capitalized cost of PPE?

• Freight costs

• Installation costs

• License Fees

BOBS Corporation is authorized to sell 5 million shares of stock. 870,000 shares have been issued, 40,000 shares have been reacquired by BOBS corporation. How many shares are outstanding?

• 5,910,000

• 910,000

• 830,000

• 5,830,000

Whitman corporation sold 2,500 shares of stock of $8 par value for $14 per share. How much would the additional paid in capital account for common stock increase?

• $15,000

• $20,000

• $35,000

• $55,000