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Unformatted text preview: 1. Corrieten Company purchased equipment and incurred these costs: What amount should be recorded as the cost of the equipment? A. $24,00 0. B. $25,200. C. $25,400. D. $25,800. 2. Harrington Corporation recently leased a number of trucks from Andre Corporation. In inspecting the books of Harrington Corporation, you notice that the trucks have not been recorded as assets on its balance sheet. From this you can conclude that Harrington is accounting for this transaction as a(n): A. operating lease. B. capital lease. C. purchase. D. None of the above. 3. Depreciation is a process of: A. valuatio n. B. cost allocation. C. cash accumulation. D. appraisal. 4. Cuso Company purchased equipment on January 1, 2009, at a total invoice cost of $400,000. The equipment has an estimated salvage value of $10,000 and an estimated useful life of 5 years. What is the amount of accumulated depreciation at December 31, 2010, if the straight-line method of depreciation is used? A. $80,00 0. B. $160,000. C. $78,000. D. $156,000. 5. A company would minimize its depreciation expense in the first year of owning an asset if it used: A. a high estimated life and declining-balan B. a low estimated life, a high salvage value, and straight-li C. a high estimated life, a high salvage value, and straight-...
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This note was uploaded on 02/28/2012 for the course ACCT 460 taught by Professor Charley during the Spring '12 term at Aachen University of Applied Sciences.
- Spring '12