ACG 2021, Principles of Financial Accounting
Exam 3 – Practice Questions
: Correct answers appear on the final page.
On January 1, 2006, The Wichita Eagle purchased a new printing press at
a cost of $50,000. The estimated residual value is $10,000, and the
estimated useful lie is 10 years. The Wichita Eagle uses the straight-line
depreciation method. On January 1, 2008, The Eagle’s management
estimates that the press only has 3 years of estimated useful remaining.
What is the balance in the Accumulated Depreciation
December 31, 2008
On January 2, 2003, Kedri Kemper purchased a new truck for $20,000.
The estimated life of the equipment is 5 years or 100,000 miles. The
estimated residual value is $1,000. What is the
equipment on December 31, 2004
if Kedri uses the double-declining
method of depreciation?
On January 1, 2005, Colby Miners purchased the rights to a coal mine for
$200,000. This mine contains an estimated 20,000 tons of coal, but has
no estimated residual value. Colby Miners estimates that it will use the
coal mine for 5 years. During 2005, 5,000 tons of coal were removed from
the mine. To record
for 2005, Colby Miners will:
Debit Depletion Expense for $40,000
Debit Depletion Expense for $50,000
Credit Depletion Expense for $40,000
Credit Depletion Expense for $50,000
4. The Polar Freeze paves a new parking lot in its restaurant. This parking lot