201 ANSWER Quiz 7

201 ANSWER Quiz 7 - 12,000 b. 12/31/07 Interest expense...

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ANSWER KEY Quiz 7 1. C Accordingly, the asset's book value at the end of 2010 would be $32,400 . BOY BV = Beginning of Year Book Value DB Rate = Declining Balance Rate of Depreciation (100%/5 x 2) EOY BV = End of Year Book Value 2. E 3. E [(22,000 - 2,000) / 4] x 10/12 = $4,166.67 of accumulated depreciation at the end of 2008. Since annual depreciation expense is $5,000 [(22,000 - 2,000) / 4], accumulated depreciation on December 31, 2011 would be $19,166.67 ($5,000 per year for three years + $4,166.67 in the partial year of 2008). 4. A Problem (60 points)
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. a. 11/1/07 Accounts payable . .................................................. 12,000 Notes payable . ..................................................
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Unformatted text preview: 12,000 b. 12/31/07 Interest expense $12,000 x 0.05 x 2/12 100 Interest Payable 100 c. 2/1/08 Notes payable . ....................................................... 12,000 Interest payable . .................................................... 100 Interest expense ($12,000 x 0.05 x 1/12) . .............. 50 Cash . ................................................................. 12,150 a. ($325,000 - $25,000)/8 = $37,500 for both 2007 and 2008 b. 100%/8 x 2 = 25% .25 x $325,000 = $81,250 for 2007 .25 x ($325,000 - $81,250) = $60,937.50 for 2008 c. ($325,000 - $25,000)/60,000 = $5 per hour $5/hour x 8,000 hours = $40,000 for 2007 $5/hour x 8,700 hours = $43,500 for 2008...
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201 ANSWER Quiz 7 - 12,000 b. 12/31/07 Interest expense...

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