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Unformatted text preview: A. $83,500. B. $84,300. C. $85,300. D. $75,000. $75,000 + $4,500 + $4,000 + $800 = $84,300. 4. The purchase of a new cooling system for $150,000 to upgrade an office building owned by the company would be accounted for as: A. Goodwill. B. An addition in the Buildings account. C. An expense in the period incurred. D. A patent. 5. Kansas Enterprises purchased equipment for $60,000 on January 1, 2012. The equipment is expected to have a five-year life, with a residual value of $5,000 at the end of five years. Using the straight-line method, depreciation expense for 2012 would be: A. $12,000. B. $11,000. C. $60,000. D. None of the other answers are correct. Depreciation expense = (($60,000 - $5,000)/5 years) = $11,000. 6. The return on assets is equal to the: A. Profit margin plus asset turnover. B. Profit margin minus asset turnover. C. Profit margin times asset turnover. D. Profit margin divided by asset turnover....
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- Summer '08