Chapter 7: Plant Assets & Intangibles

7.2-32 On January 2, 2010, KJ Corporation acquired equipment for $260,000. The estimated life of the equipment is 5 years or 40,000 hours. The estimated residual value is $20,000. What is the balance in Accumulated Depreciation on December 31, 2011, if KJ Corporation uses the straight-line method of depreciation?

A)	$96,000
B)	$49,500
C)	$51,500
D)	$53,625

7.2-33 On January 2, 2010, KJ Corporation acquired equipment for $260,000. The estimated life of the equipment is 5 years or 40,000 hours. The estimated residual value is $20,000. What is the book value of the asset on December 31, 2011, if KJ Corporation uses the straight-line method of depreciation?

A) $80,000

B) $96,000

C) $104,000

D) $164,000

Copyright 2010 Pearson Education Inc. Publishing as Prentice Hall. 28

7.2-34 On January 2, 2010, KJ Corporation acquired equipment for $260,000. The estimated life of the equipment is 5 years or 40,000 hours. The estimated residual value is $20,000. What is the balance in Accumulated Depreciation on December 31, 2010, if KJ Corporation uses the double-declining-balance method of depreciation?

A)	$62,400
B)	$88,000
C)	$96,000
D)	$104,000

Copyright 2010 Pearson Education Inc. Publishing as Prentice Hall. 29

7.2-35 On January 2, 2010, KJ Corporation acquired equipment for $260,000. The estimated life of the equipment is 5 years or 40,000 hours. The estimated residual value is $20,000. What is the balance in Accumulated Depreciation on December 31, 2011, if KJ Corporation uses the double-declining-balance method of depreciation?

A) $104,000

B) $38,400

C) $166,400

D) $104,000

7.2-36 On January 10, 2010, Maxim Corporation acquired equipment for $ 124,000. The estimated life of the equipment is 3 years or 24,000 hours. The estimated residual value is $10,000. What is the depreciation for 2010, if Baldwin Corporation uses the asset 9,100 hours and uses the units-of-production method of depreciation?

A) $43,225

B) $47,017

C) $41,333

D) $38,000

Copyright 2010 Pearson Education Inc. Publishing as Prentice Hall. 30

7.2-37 On January 10, 2010, Maxim Corporation acquired equipment for $124,000. The estimated life of the equipment is 3 years or 24,000 hours. The estimated residual value is $10,000. What is the balance of Accumulated Depreciation on December 31, 2011, if Baldwin Corporation uses the asset 5,500 hours in 2010 and 4,500 hours in 2011?

A) $76,000

B) $61,218

C) $52,083

D) $47,500

7.2-38 On January 2, 2011, Mosby Corporation acquired equipment for $ 200,000. The estimated life of the equipment is 8 years or 35,000 hours. The estimated residual value is $40,000. What is the book value of the equipment on December 31, 2011, if Mosby Corporation uses the double-declining-balance method of depreciation?

A)	$128,000
B)	$150,000
C)	$87,500
D)	$72,000

Copyright 2010 Pearson Education Inc. Publishing as Prentice Hall. 31

7.2-39 On January 2, 2011, Mosby Corporation acquired equipment for $ 200,000. The estimated life of the equipment is 8 years or 35,000 hours. The estimated residual value is $40,000. What is the amount of depreciation expense for 2011, if the company uses the double-declining-balance method of depreciation?

A) $112,500

B) $87,500

C) $50,000

D) $30,000

7.2-40 On January 2, 2011, Heidi’s Pet Boutique purchased a television for the dog sitting area which cost $8,000. It had an estimated useful life of 5 years and a residual value of $1,000. What is the amount of depreciation expense for 2012, the second year of the asset’s life using the double declining-balance method?

A)	$3,200
B)	$8,000
C)	$1,920
D)	$2,080

Copyright 2010 Pearson Education Inc. Publishing as Prentice Hall. 32