Page 1 of 5
Chapter 10 Graded Quiz – 19/20 Correct, 95%
Gregory M Hernandez
20.00 points possible
11/14/2009 8:53:33 AM
Many companies use an accelerated depreciation method because:
C) It yields larger depreciation expense in the early years of an asset's life.
B) Refers to a plant asset that is no longer useful in producing goods and services.
A company purchased property for $100,000. The property included a building, a parking lot, and land. The
building was appraised at $62,000; the land at $45,000, and the parking lot at $18,000. Land should be
recorded in the accounting records with an allocated cost of:
B) $ 36,000.
$100,000 x $45,000/($62,000 + $45,000 + $18,000) = $36,000
Huffington Company traded in an old delivery truck for a new one. The old truck had a cost of $75,000 and
accumulated depreciation of $60,000. The new truck had an invoice price of $125,000. Huffington was given a
$12,000 trade-in allowance on the old truck, which meant they paid $113,000 in addition to the old truck to
acquire the new truck. If this transaction has commercial substance, what is the recorded value of the new
As the transaction has commercial substance and there is a loss on the exchange, the new asset
is recorded at its market value.