Bus230AMini8Spring08

Bus230AMini8Spring08 - Sonoma State University Bus 230A...

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Sonoma State University Bus 230A Spring 2008 - Minitest 8 Mark LeVine 1. Depreciation is a method of allocating the cost of an asset a. over periods of declining value b. over the asset’s useful life c. over periods during which the company is paying for the asset d. during the life of the company 2. Solso Solariums purchases land and a building for a combined price of $260,000. The appraised value of the building accounts for 70% of the total purchase price. At the date of purchase, what is the cost of the land and the building that will be reported on Solso Solariums’ financial statements? a. The land is $65,000 and the building is $195,000. b. The land is $78,000 and the building is $182,000. c. The land is $182,000 and the building is $78,000. d. The land is $195,000 and the building is $65,000. 3. Garrido’s Green Garden Grocery Grotto purchases equipment for $154,000. The equipment has an estimated useful life of 8 years and a salvage value of $6,000. What is the annual deprecation that will be taken on this equipment using the straight-line method? a.
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Bus230AMini8Spring08 - Sonoma State University Bus 230A...

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