1)Shawnee Hospital installs a new parking lot

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1)Shawnee Hospital installs a new parking lot. The paving cost $30,000 and the lights to illuminate the new parking area cost $15,000. Which of the following statements is true with respect to these additions?

a.   $30,000 should be debited to the Land account.

b.   $15,000 should be debited to Land Improvements.

c.   $45,000 should be debited to the Land account.

d.   $45,000 should be debited to Land Improvements.

2)  A company purchased factory equipment on April 1, 2008 for $64,000. It is estimated that the equipment will have an $8,000 salvage value at the end of its 10-year useful life. Using the straight-line method of depreciation, the amount to be recorded as depreciation expense at December 31, 2008 is

a.   $6,400.

b.   $5,600.

c.   $4,200.

d.   $4,800.

3) A company purchased office equipment for $40,000 and estimated a salvage value of $8,000 at the end of its 5-year useful life. The constant percentage to be applied against book value each year if the double-declining-balance method is used is

a.   20%.

b.   25%.

c.   40%.

d.   4%.

4) The declining-balance method of depreciation produces

a.   a decreasing depreciation expense each period.

b.   an increasing depreciation expense each period.

c.   a declining percentage rate each period.

d.   a constant amount of depreciation expense each period.

5) A company purchased factory equipment for $250,000. It is estimated that the equipment will have a $25,000 salvage value at the end of its estimated 5-year useful life. If the company uses the double-declining-balance method of depreciation, the amount of annual depreciation recorded for the second year after purchase would be

a.   $100,000.

b.   $60,000.

c.   $90,000.

d.   $43,200.