acct229exam2key - Name Section Instructor EXAM 2 Form A...

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Name _____________________________________ Section ____________ Instructor _____________ EXAM 2 Form A Accounting 229 Fall, 2004 Ch. 5 – 8 Multiple Choice (48 pts.) _____________ Workout (52 pts.) _____________ Total Score _____________ Texas A&M University is dedicated to establishing an atmosphere of academic integrity. To insure that each student is aware of what constitutes academic dishonesty, the Academic Integrity Task Force has published definitions of academic misconduct. Please read the following definitions and clarifications from the proposed honor system. Indicate by your signature at the bottom of the page if you understand the definitions. Cheating: Intentionally using or attempting to use unauthorized materials, information, notes, study or other devices or materials in any academic exercise. Clarification: a. During an examination, looking at another student’s exam or using external aids (for example, books, notes, calculators, conversations with others, electronic devices) unless specifically allowed in advance by the instructor. Complicity: Intentionally or knowingly helping, or attempting to help, another to commit an act of academic dishonesty. Clarification: a. Knowingly allowing another to copy from one’s paper during an exam. b. Distributing test questions or substantive information about the test without the instructor’s permission. c. Conspiring or agreeing with one or more persons to commit, or attempting to commit, any act of scholastic dishonesty. I understand the honor system definitions and clarifications concerning academic dishonesty during exams. I also understand that a violation of any of the above will be grounds for reporting and adjudication as described in the honor system procedures. On my honor, as an Aggie, I have neither given nor received unauthorized aid on this academic work. Signature ________________________________________ Date ________________________ 1
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Accounting 229 Exam 2A (Ch. 5-8) Fall 2004 1. Use the following information to answer the next 3 questions: (3 pts. each) A company’s schedule of depreciable assets at Dec. 31, 2004 is as follows. The useful life of each depreciable asset is 5 years. Asset Cost Accum. depr. Acquisition date Salvage value A $ 55,000 $ 43,120 Jan. 1, 2002 $ 10,000 B 100,000 64,000 Jan. 1, 2003 20,000 C 70,000 22,400 Jan. 1, 2003 14,000 (A) The company depreciates Asset B using the double-declining balance method. How much depreciation expense should the company record in 2005 for Asset B ? $ 14,400 2/5 x [100,000 – 64,000] = 14,400 (B) The company depreciates Asset C by the straight-line method. On Oct. 1, 2005, the company sells Asset C for $24,000 cash. How much gain or loss (specify which) should the company record in 2005 on the disposal of Asset C ? $ __ 15,200 loss _______________ 70,000 – 14,000 = 11,200 per year A.D. = 2003: 11,200 5 yrs. 2004: 11,200 2005: 8,400 (11,200 x9/12) 30,800 Cost 70,000 - A.D. (30,800) B.V. 39,200 24,000 cash |________________| 15,200 loss (C) Using the same depreciation method as used in 2002, 2003, and 2004, how much depreciation expense should the company record in 2005 for Asset A ? (You must first determine which depreciation method was used.) $ 1,880 2x[55,000 – 43,120] = 4,752 Depr. Base: 55,000 cost 45,000 depr. base 1880 max (10,000) salvage (43,120) A.D.
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