Mgmt_200_Spring_2007_Exam_3(3,25)

Mgmt_200_Spring_2007_Exam_3(3,25) - Name: _ PUID: _ Purdue...

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Name: ________________________ PUID: ________________________ Purdue University Krannert School of Management MGMT 200 – Introductory Financial Accounting Spring 2007 Exam 3 – April 2, 2007 This exam consists of 4 questions on 8 pages (excluding this cover page and the present value table page = 10 pages total) for a total of 100 points. Time allowed: 90 minutes. Answer all questions. To ensure full credit and to maximize partial credit, clearly show all supporting calculations. The exam is closed book. A calculator is permitted. Present value tables are provided on the last page. GOOD LUCK . Question 1 (25 points) ________ Question 2 (25 points) ________ Question 3 (25 points) ________ Question 4 (25 points) ________ TOTAL (100 points) ________
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Question 1. Property, Plant, and Equipment (25 points) West Baden City Corporation purchased a new trash truck on January 1, 2004. The truck cost $864,000. West Baden paid $164,000 cash and signed a five-year 7% note for the balance. At the time of purchase the truck was estimated to have a useful life of 9 years and an estimated resale value at the end of year 9 of $9,000. The trash truck will be used to collect trash from households in the city and is estimated to travel 57,000 miles during its 9 year life. Required: a. Prepare the journal entry to record the purchase of the truck on January 1, 2004. b. Prepare the journal entry to record depreciation expense for 2004 assuming West Baden City Corporation elects to depreciate the machine using the straight-line method. c. Prepare the journal entry to record depreciation expense for 2004 assuming West
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Mgmt_200_Spring_2007_Exam_3(3,25) - Name: _ PUID: _ Purdue...

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