Aldlo\'s purchased equipment foe $60,000 on Jamusry 1, 2017. The equipment is ex

Question

Aldlo's purchased equipment foe $60,000 on Jamusry 1, 2017. The equipment is expected to have year life, with a residual valoe of $5,000 at the end of live years Using the A 524,000. balance method, depreciation expesse for 2017 would be: C. $19,000. D. $20,000 21, Supplies, Ine purchased a truck for $65,000. During the first two years, Supplies, Inc. drove the truck a 5,000 and 3,000 miles, respectively, to estimated life ofs years or 30,000 miles, with an estimated residual valuc of S5,000, what amount of Spemse should Supplies, Ine. record in the scond sxear using the activity-based methodr B. $6,500 C. $12,000 D. $6,000 ny purchased a computer that cost S10,000. It had an estimated useful life of 5 years and computer was depreciated by the straight-line method and was sold at the end of no residual value. The the fourth year of use for $1,000 cash. Abbott should record: A. a gain of S1,000. B. a loss of $1,000. C. neither a gain nor a loss-the computer was sold at its book value. D. neither a gain nor a loss- the gain that occurred in this case would not be recognized. Which of the following is not withheld from an employee's salary? A. FICA taxes (SSMCR) B. Federal and state unemployment taxes. (FUTA/SUTA) C. Federal and state income taxes. (FIT/SIT) 23. D. Employee portion of health insurance. 24, On October 1, 2017, The Bagel Factory signed a $100,000, 6%, six-month note payable with the amount borrowed plus accrued interest due six months later on April 1, 2018. The Bagel Factory should report interest payable at December 31,2017, in the amount of A.$0. B. S1,000. C. $1,500 D. $3,000

Explanation / Answer

20)Straight-line Depreciation Rate = 1 ÷ 5 = 0.2 = 20%(1/5years)
Double Declining Balance Rate = 2 × 20% = 40%
Depreciation = 40% × $60,000 = $24,000

So the option A, is the right answer.

21)Firstly lets cost Depreciation Per mile = Cost of Asset - Residual Value /Estimated 30000 miles

= $65000-$5000/30000miles

= $2 per mile.

Therefore Depreciation for Second year = Number of miles the truck is used for the period* rate per mile

= 3000miles* $2

= $6000

Therefore Option D is correct

22)Abbott Company should record a loss of $ 1000, Option B is correct.

Cost of the computer = 10000

Estimated life = 5 years

Depreciation per year = 10000/5= $2000

At the end of 4th year the value of computer = 10000-8000= $2000

(2000*4years)

Sale value at the end of 4th year = $1000

therefore the computer is sold for less than its book value for a loss of $1000($2000-$1000)

23)Option B is Right

FUTA:The Federal Unemployment Tax Act (FUTA) is a federal law that imposes an unemployment tax on employers. The FUTA tax funds the federal government’s oversight of each state’s unemployment program. Only employers pay FUTA tax; there is not a withholding from employee wages.

SUTA: The state unemployment tax act, also called SUTA, imposes a tax on the wages that employers pay to their employees. This tax is used by the state to fund the unemployment insurance programs to benefit fired or laid off employees. This tax is similar to the FUTA tax that the federal government levies on employers.

24) If an interest of $3,000 on a note payable has been incurred but is paid in the next fiscal year, for the current year ended December 31, 2017, the company shall record $ 3000* as Interest Payable as it has already occured.

* $100000*6%*6/12=$3000

Option D is correct.

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