Question

1. Lynda Inc. purchased a piece of equipment for $15,000. Additional costs include transportation, $300; installation, $700; test run, $1,000; and insurance from the date that the equipment begins productive output, $1,200. What is the capitalized amount of the equipment? a. $17,000 b. $18,200 c. $16,000 d. $15,000 2. Albany Inc. purchased land for S100,000. It paid $20,000 to raze an old building and it received $2,000 for salvage of materials. What is the cost of the land? a $100,000 b. $120,000 c. $122,000 d. $118,000 3. A company purchased a piece of equipment for $23,000 on March 1, 2019. Management estimates a salvage value of $3,000, a useful life of 5 years and estimated production output of 11,000 units. It produced 2,000 units in 2019. Where applicable, it applies the half-year rule. What is depreciation expense for 2019 using the units- of-production method (rounded to nearest dollar)? a. $3,030 b. $4,000 c. $3,636 d. $3,333 4. A company purchased a piece of equipment for $30,000 on May 1, 2019. Management estimates a salvage value of $4,500, a useful life of four years and estimated production output of 15,000 units. It produced 3,000 units in 2019. Where applicable, it applies the half-year rule. What is depreciation expense for 2020 using the straight line method (rounded to nearest dollar)? a $3,400 b. $4,250 c. 55,100 d. S6,375 5. A company purchased a piece of equipment for $30,000 on May 1, 2019. Management estimates a salvage value of $4,500, a useful life of four years and estimated production output of 15,000 units. It produced 3,000 units in 2019. Where applicable, it applies the half-year rule. What is depreciation expense for 2019 using the straight line method (rounded to nearest dollar)? a. $3,188 b. S5,100 c. $6,375 d. $7,500