CRJ 180 WEEK 5 Midterm Exam Answers

The document contains answers to multiple choice questions for CRJ 180 WEEK 5 Midterm Exam

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ACC 304 Week 5 Midterm Part 1 (Set 3) NEW
1) Tongas Company applies revaluation accounting to plant assets with a carrying value of
$1,600,000, a useful life of 4 years, and no salvage value. Depreciation is calculated on the
straight-line basis. At the end of year 1, independent appraisers determine that the asset
has a fair value of $1,500,000.
The journal entry to adjust the plant assets to fair value and record revaluation surplus in
year one will include a credit to Revaluation Surplus for $300,000.
2) Tongas Company applies revaluation accounting to plant assets with a carrying value of
$1,600,000, a useful life of 4 years, and no salvage value. Depreciation is calculated on the
straight-line basis. At the end of year 1, independent appraisers determine that the asset
has a fair value of $1,500,000.
The journal entry to adjust the plant assets to fair value and record revaluation surplus in
year one will include a credit to Revaluation Surplus for $300,000.
3) A major objective of MACRS for tax depreciation is to C. help companies achieve a faster
write-off of their capital assets.
4) Sifton Company reported the following data:
2014 2015
Sales $3,000,000 $3,900,000
Net Income 300,000 400,000
Assets at year end 1,800,000 2,500,000
Liabilities at year end 1,100,000 1,500,000
What is Sifton’s asset turnover for 2015?
c. 1.81
5) Which of the following principles best describes the conceptual rationale for the methods
of matching depreciation expense with revenues? B. systematic and rational allocation
6) Slotkin Products purchased a machine for $39,000 on July 1, 2014. The company intends
to depreciate it over 8 years using the double-declining balance method. Salvage value is
$3,000. Depreciation for 2014 is $4,875