Unit 08 Seminar Quiz Use the following information to answer questions 1-5. A pr
ID: 2372377 • Letter: U
Question
Unit 08 Seminar Quiz
Use the following information to answer questions 1-5.
A pressurized spray painter was purchased on April 1 of the fiscal year for $3,900. It has a useful life of 4 years,
and a residual value of $300.
1. Determine depreciation expense for year one using the straight-line method. (Points : 3) $300
$3900
$600
$675
2. Determine depreciation expense for year one using the double-declining-balance method. (Points : 3) $3900.00
$1462.50
$2437.50
$1500.00
3. Determine depreciation expense for two using the straight-line method. (Points : 3) $300
$3900
$600
$900
4. Determine depreciation expense for year two using the double-declining-balance method. (Points : 3) $1218.75
$3900
$2437.50
$1500.00
5. If the equipment is sold at the end of year one for $3225, what will be the gain or loss on the sale,
assuming that the company used the straight line method of depreciation. (Points : 3) $1000
$100
$2225
$0
Explanation / Answer
1. 675 (3,900-300)/4 *9/12 2. 1,462.50 3900*2/4 *9/12 3. 900 (3,900-300)/4 4. 1218.75 (3,900-1,462.50)*2/4 5. 0 3225-(3900-675)
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