kaplan ac113 unit 8 9 and unit 10 quizes

Unit 8

Question 1. Question :

A machine was purchased for $45,000. It has a useful life of 6 years and a residual value of $6,000. Under the straight-line method, what is the annual depreciation expense?

$7,500

$15,000

$3,750

$6,500

Comments:

Question 2. Question :

A company acquired mineral rights for $10,000,000 which are estimated at 80,000 tons. During the year 15,000 tons were extracted and sold. How much depletion should be recorded for the year?

$5,000,000

$1,875,000

$3,750,000

$2,500,000

Comments:

Question 3. Question :

A company sold a delivery truck for $18,000 cash. The truck cost $47,500 and had accumulated depreciation of $36,000 as of the date of sale. The sale would include a(n):

increase in Accumulated Depreciation for $36,000

decrease in Delivery Truck for $11,500

increase in a loss for $6,500

increase in a gain for $6,500

Comments:

Question 4. Question :

Which of the following factors are used in computing depreciation expense? Residual Value, Useful Life, Market Value, Initial Cost?

Yes, Yes, No, Yes

Yes, Yes, Yes, Yes

Yes, No, No, Yes

No, Yes, Yes, No

Comments:

Question 5. Question :

Fixed assets _______.

are shown at their fair market value

must be shown on the face of the balance sheet by class of fixed asset

are normally shown under the caption of property, plant and equipment

must be shown on the face of the balance sheet by class of fixed asset and are shown at their book value or at their fair market value, whichever is lower

Points Received: 0 of 1

Comments:

Un it 9

Mickey Mouse Co. announced a 2-for-1 stock split of its $20 par value common stock, which is currently trading for $60 per share. What is the new par value and the estimated market price of the stock after the split? What is the New Par Value and the Estimated market price of the stock?

$10, $30

$20, $30

$10, $60

$40, $120

Comments:

Question 2. Question :

Assume that Corporation X has 20,000 shares of $10 par value cumulative 6% preferred stock and 5,000 shares of common stock outstanding. No dividends were paid in 2009 and 2010. In 2011, the board of directors declares dividends of $50,000. What is the total cash paid to the preferred stockholders in 2011?

$12,000

$24,000

$36,000

Zero

Comments:

Question 3. Question :

RR Inc. issued $100,000, 8%, 10-year bonds on January 1, 2008. The bonds were issued at a discount of $24,600. Using the straight-line method, what is the annual amount of interest expense for these bonds?

$10,460

$8,000

$5,540

Cannot be determined from the information given

Comments:

Question 4. Question :

Stock dividends are:

distributions of common stock to holders of common stock

distributions of cash or other assets to shareholders

normally recorded at the par value of the stock issued

required of companies periodically, according to their corporate charters

Points Received: 0 of 1

Comments:

Question 5. Question :

An employee earns $18 per hour and 1 1/2 times that rate for all hours worked in excess of 40 hours per week. Assume that the employee works 46 hours during the week and the FICA tax rate is 7% and federal income tax withheld is $185. The employee's net pay is __________.

$635.26

$586.04

$882.00

None of these choices

Comments:

Unit 10

Unit 10

A bond indenture is:

a contract between the corporation issuing the bonds and the underwriters selling the bonds.

the amount due at the maturity date of the bonds.

a contract between the corporation issuing the bonds and the bondholders.

the amount for which the corporation can buy back the bonds prior to the maturity date.

Comments:

Question 2. Question :

In which section of the balance sheet would treasury stock be reported?

Fixed assets

Long-term liabilities

Stockholders' equity

Intangible assets

Comments:

Question 3. Question :

If 50,000 shares are authorized, 37,000 shares are issued, and 2,000 shares are reacquired, the number of outstanding shares is 35,000.

True False

Comments:

Question 4. Question :

Paid-in capital and retained earnings are the two major categories of stockholders' equity for a corporation.

True False

Comments:

Question 5. Question :

When the market rate of interest on bonds is equal to the contract rate, the bonds will sell at:

a premium.

their face value.

a discount.

a discount or a premium.

Comm€ents: