practice test 3 - ACG 2021, Principles of Financial...

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ACG 2021, Principles of Financial Accounting Exam 3 – Practice Questions Note : Correct answers appear on the final page. 1. 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 account on December 31, 2008 ? a. $18,667 b. $21,333 c. $22,000 d. $24,000 2. 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 book value of the equipment on December 31, 2004 if Kedri uses the double-declining balance method of depreciation? a. $4,800 b. $7,200 c. $12,000 d. $12,800 3. 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 depletion for 2005, Colby Miners will: a. Debit Depletion Expense for $40,000 b. Debit Depletion Expense for $50,000 c. Credit Depletion Expense for $40,000 d. Credit Depletion Expense for $50,000 4. The Polar Freeze paves a new parking lot in its restaurant. This parking lot
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This note was uploaded on 11/15/2011 for the course ACG 2021 taught by Professor Hornik during the Fall '08 term at University of Central Florida.

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practice test 3 - ACG 2021, Principles of Financial...

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