Solutions.W09.final

Solutions.W09.final - 1 CONCORDIA UNIVERSITY FINANCIAL...

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1 CONCORDIA UNIVERSITY   FINANCIAL ACCOUNTING DEPARTMENT OF ACCOUNTANCY             COMM 217 ALL SECTIONS SUGGESTED SOLUTION FINAL EXAMINATION  WINTER 2009 Question 1   (24 marks)         Multiple-choice (1.5 marks per correct answer) 1. c 2. b 3. b 4. c 5. b 6. b 7. a 8. c 9. d 10. b 11. a 12. c 13. b 14. c
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2 15. c 16. b
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3 QUESTION 2 (19 marks) Req. 1 (3 marks) The acquisition cost of the machine = $80,000  + 2,000  + 1,000  = $83,000 Equipment (or Machinery) . ................................ 83,000          Cash . ......................................................... 33,000         Notes Payable . .......................................... 50,000  Req. 2 (5 marks) a. Straight-line method 2007: Amortization expense = ($83,000  – 1,500) / 10 years  = $8,150 2008: Amortization expense = $8,150  b. Double-declining-balance method 2007: Amortization expense = ($83,000  – 0 ) x (2/10) = $16,600 2008: Amortization expense = ($83,000 – 16,600 ) x (2/10)  = $13,280 Req. 3 (2 marks) The $10,000 is a capital expenditure , because the replacement of a major part of the  machine increased its useful life and its residual value.   Req. 4 (3 marks) Net book value of the machine after the replacement, Jan. 1, 2008 = $83,000  + 10,000  – $8,150  x 2  = $76,700 Remaining useful life = 10 – 2 + 4 = 12 years  Amortization expense 2008 = ($76,700 – 2,300 ) / 12 = $6,200 Req. 5 (6 marks) Amortization expense from January 1 to June 30, 2009 = $6,200  x (6/12)  = $3,100 Amortization expense . ....................................... 3,100         Accumulated Amortization . ........................ 3,100 Accumulated amortization, June 30, 2009
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This note was uploaded on 12/09/2009 for the course ACCO comm 217 taught by Professor Mroz during the Fall '09 term at Concordia Canada.

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Solutions.W09.final - 1 CONCORDIA UNIVERSITY FINANCIAL...

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