Chapter 11 - Depreciation, Impairments, and Depletion - 6th

Kleinschmidt Company purchased a depreciable asset for €2,000,000. The estimated salvage value is €150,000, and the estimated useful life is 400,000 hours. Kleinschmidt used the asset for 35,000 hours in the current year. The activity method will be used for depreciation. What is the depreciation expense on this asset?

• €160,870

• €161,875

• €175,000

• €350,000

On January 1, 2009, Fleming Company purchased equipment at a cost of CHF650,000. The equipment was estimated to have a salvage value of CHF55,000 and it is being depreciated over seven years under the sum-of-the-year’s-digits method. What should be the charge for the depreciation of this equipment for the year ended December 31, 2015?

• CHF21,250

• CHF23,214.

• CHF85,000

• CHF148,750

Stevenson Company purchased a depreciable asset for $250,000 on April 1, 2012. The estimated residual value is $25,000, and the estimated useful life is 5 years. The straight-line method is used for depreciation. What is the balance in accumulated depreciation on May 1, 2015 when the asset is sold?

• $90,000

• $105,000

• $123,750

• $138,750

Williamson Corporation purchased a depreciable asset for $300,000 on January 1, 2012. The estimated residual value is $30,000, and the estimated useful life is 9 years. The straight-line method is used for depreciation. In 2015, Williamson changed its estimates to a total useful life of 5 years with a salvage value of $50,000. What is 2015 depreciation expense?

• $30,000

• $50,000

• $80,000

• $90,000

Rollins Company purchased a depreciable asset for $300,000 on April 1, 2012. The estimated residual value is $30,000, and the estimated total useful life is 5 years. The straight-line method is used for depreciation. What is the balance in accumulated depreciation on May 1, 2015 when the asset is sold?

• $118,000

• $126,000

• $148,500

• $166,500

Fanestil Corporation purchased a depreciable asset for $420,000 on January 1, 2012. The estimated residual value is $42,000, and the estimated total useful life is 9 years. The straight-line method is used for depreciation. In 2015, Fanestil changed its estimates to a total useful life of 5 years with a residual value of $70,000. What is 2015 depreciation expense?

• $42,000

• $70,000

• $112,000

• $126,000

Archer Company purchased equipment in January of 2005 for $90,000. The equipment was being depreciated on the straight-line method over an estimated useful life of 20 years, with no residual value. At the beginning of 2015, when the equipment had been in use for 10 years, the company paid $15,000 to overhaul the equipment. As a result of this improvement, the company estimated that the useful life of the equipment would be extended an additional 5 years. What should be the depreciation expense recorded for this equipment in 2015?

• $3,000

• $4,000

• $4,500

• $5,500

Marsh Corporation purchased a machine on July 1, 2012, for $750,000. The machine was estimated to have a useful life of 10 years with an estimated residual value of $42,000. During 2015, it became apparent that the machine would become uneconomical after December 31, 2019, and that the machine would have no scrap value. Accumulated depreciation on this machine as of December 31, 2014, was $177,000. What should be the charge for depreciation in 2015?

• $106,200

• $114,600

• $123,000

• $143,250

Rivera Company purchased a tooling machine on January 3, 2008 for $500,000. The machine was being depreciated on the straight-line method over an estimated useful life of 10 years, with no residual value. At the beginning of 2015, the company paid $125,000 to overhaul the machine. As a result of this improvement, the company estimated that the useful life of the machine would be extended an additional 5 years (15 years total). What should be the depreciation expense recorded for the machine in 2015?

• $34,375

• $41,667

• $50,000

• $55,000

Gates Co. purchased machinery on January 2, 2009, for $440,000. The straight-line method is used and useful life is estimated to be 10 years, with a $40,000 residual value. At the beginning of 2015 Gates spent $96,000 to overhaul the machinery. After the overhaul, Gates estimated that the useful life would be extended 4 years (14 years total), and the residual value would be $20,000. The depreciation expense for 2015 should be

• $28,250.

• $34,500.

• $40,000.

• $37,000.