Principles of Accounting Volume 1
19th Edition
ISBN: 9781947172685
Author: OpenStax
Publisher: OpenStax College
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Textbook Question
Chapter 11, Problem 8MC
An accelerated
A. units-of-production depreciation
B. double-declining-balance depreciation
C.
D. straight-line depreciation
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Which depreciation method will compute the most depreciation expense over the life of the asset? O Declining-balance will produce the most depreciation expense.
O Units-of-production will produce the most depreciation expense.
O All methods will produce equal depreciation expense over the life of the asset.
O Straight-line will produce the most depreciation expense
The depreciation method that produces larger depreciation expense during the early years of an asset's life and smaller expense in the later years is a(an):
Multiple Choice
Accelerated depreciation method.
Book value depreciation method.
Straight-line depreciation method.
Units-of-production depreciation method.
Unrealized depreciation method.
Which of the following will maximize net income by minimizing depreciation expense in the first year of the asset’s life? a. Short service life, high residual value, and straightline depreciation.b. Long service life, high residual value, and straightline depreciation.c. Short service life, low residual value, and doubledeclining- balance depreciation.d. Long service life, high residual value, and doubledeclining- balance depreciation.
Chapter 11 Solutions
Principles of Accounting Volume 1
Ch. 11 - Property, Plant, and Equipment is considered why...Ch. 11 - Which of the following would not be considered an...Ch. 11 - The legal protection that provides a company...Ch. 11 - Which of the following statements about...Ch. 11 - Ngo Company purchased a truck for $54,000. Sales...Ch. 11 - If a company capitalizes costs that should be...Ch. 11 - Depreciation of a plant asset is the process of...Ch. 11 - An accelerated depreciation method that takes more...Ch. 11 - The estimated economic life of an asset is also...Ch. 11 - The amortization process is like what other...
Ch. 11 - How are intangible assets with an indefinite life...Ch. 11 - If the market value of goodwill is found to be...Ch. 11 - Which of the following represents an event that is...Ch. 11 - Which of the following is true regarding special...Ch. 11 - The loss in value from all causes within a...Ch. 11 - What is the difference between tangible and...Ch. 11 - Define intangible assets.Ch. 11 - What is the difference between a patent and a...Ch. 11 - What is goodwill, and how is it generated?Ch. 11 - For each of the following transactions, state...Ch. 11 - What amounts should be recorded as a cost of a...Ch. 11 - Describe the relationship between expense...Ch. 11 - Define natural resources.Ch. 11 - Explain the difference between depreciation,...Ch. 11 - Explain the differences between the process of...Ch. 11 - What is goodwill, and what are the unique aspects...Ch. 11 - What are some examples of special issues in...Ch. 11 - What is the difference between functional...Ch. 11 - Fombell, Incorporated has the following assets in...Ch. 11 - Jada Company had the following transactions during...Ch. 11 - Montello Inc. purchases a delivery truck for...Ch. 11 - Montello Inc. purchases a delivery truck for...Ch. 11 - Steele Corp. purchases equipment for $25,000....Ch. 11 - Calico Inc. purchased a patent on a new drug. The...Ch. 11 - Alfredo Company purchased a new 3-D printer for...Ch. 11 - Using the information from EA7, calculate...Ch. 11 - Santa Rosa recently purchased a new boat to help...Ch. 11 - Warriors Productions recently purchased a...Ch. 11 - The following intangible assets were purchased by...Ch. 11 - Sand River Sales has a fork truck used in its...Ch. 11 - New Carlisle, Incorporated, has the following...Ch. 11 - Johnson, Incorporated had the following...Ch. 11 - Montello Inc. purchases a delivery truck for...Ch. 11 - Montello Inc. purchases a delivery truck for...Ch. 11 - Steele Corp. purchases equipment for $30,000....Ch. 11 - Calico Inc. purchased a patent on a new drug it...Ch. 11 - Kenzie purchased a new 3-D printer for $450,000....Ch. 11 - Using the information from EB7, calculate...Ch. 11 - Ronson recently purchased a new boat to help ship...Ch. 11 - Warriors Production recently purchased a copyright...Ch. 11 - The following intangible assets were purchased by...Ch. 11 - Baglias Wholesale Trinkets has a 3-D printer used...Ch. 11 - Selected accounts from Phipps Corporations trial...Ch. 11 - Selected accounts from Han Corporations trial...Ch. 11 - During the current year, Alanna Co. had the...Ch. 11 - During the current year, Arkells Inc. made the...Ch. 11 - Jada Company had the following transactions during...Ch. 11 - Gimli Miners recently purchased the rights to a...Ch. 11 - Tree Lovers Inc. purchased 100 acres of woodland...Ch. 11 - Referring to PA7 where Kenzie Company purchased a...Ch. 11 - For each of the following unrelated situations,...Ch. 11 - Buchanan Imports purchased McLaren Corporation for...Ch. 11 - Montezuma Inc. purchases a delivery truck for...Ch. 11 - Garcia Co. owns equipment that costs $76,800, with...Ch. 11 - Colquhoun International purchases a warehouse for...Ch. 11 - Selected accounts from Hanna Corporations trial...Ch. 11 - Selected accounts from Boxwood Corporations trial...Ch. 11 - During the current year, Alanna Co. had the...Ch. 11 - During the current year, Arkells Inc. made the...Ch. 11 - Johnson, Incorporated, had the following...Ch. 11 - Underwoods Miners recently purchased the rights to...Ch. 11 - Tree Lovers Inc. purchased 2,500 acres of woodland...Ch. 11 - Montello Inc. purchases a delivery truck for...Ch. 11 - Prepare the assets section of the balance sheet as...Ch. 11 - For each of the following unrelated situations,...Ch. 11 - On May 1, 2015, Zoe Inc. purchased Branta Corp....Ch. 11 - Farm Fresh Agriculture Company purchased Sunny...Ch. 11 - Montezuma Inc. purchases a delivery truck for...Ch. 11 - Garcia Co. owns equipment that costs $150,000,...Ch. 11 - Urquhart Global purchases a building to house its...Ch. 11 - You are an accounting student at your local...Ch. 11 - Speedy delivery service recently hired a new...Ch. 11 - Speedy Delivery has a very lazy accountant. When...Ch. 11 - Malone Industries has been in business for five...Ch. 11 - Your family started a new manufacturing business...
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- The straight-line method of depreciation allocates the cost of an asset more rapidly than the sum-of-the-years-digits method.arrow_forwardQuestion: Which method of depreciation results in a higher depreciation expense in the early years of an asset's life, making it more suitable for assets that rapidly lose their value? A) Straight-Line Depreciation B) Declining Balance Depreciation C) Units-of-Production Depreciation D) Sum-of-the-Years'-Digits Depreciationarrow_forwardWhich of the following is true? a.If using the units-of-output method, it is possible to depreciate more than the depreciable cost. b.If using the double-declining-balance method, the total amount of depreciation expense during the life of the asset will be the highest. c.If using the straight-line method, the amount of depreciation expense during the first year is higher than that of the double-declining-balance. d.Regardless of the depreciation method, the amount of total depreciation expense during the life of the asset will be the same.arrow_forward
- 26. haracteristics of Depreciation Methods In each dropdown below is a list of common depreciation methods and characteristics related to depreciation. Required: Select one or more of the depreciation methods with each characteristic. 1. Results in depreciation expense that decreases over the life of the asset 2. Results in depreciation expense that increases over the life of the asset 3. Allocates the same amount of cost to each period of a depreciable asset's life 4. Calculated by multiplying a constant depreciation rate by depreciable cost 5. Calculated by applying a constant depreciation rate to the asset's book value at the beginning of the period 6. Results in lowest income tax expense in early years of the asset's life 7. Consistent with the matching process Options: Straight-line depreciation method Declining balance depreciation method Units-of-production depreciation method when actual units produced increases over the life of the asset All of these…arrow_forwardThe write-off of the cost of an intangible asset is called a.deterioration. b.functional depreciation. c.physical depreciation. d.amortization. The write-off of the cost of plant and equipment is called a.amortization. b.depletion. c.depreciation. d.deterioration The depreciation method in which the depreciable cost of an asset is apportioned equally over its estimated life in terms of months or years is called the a.straight-line method. b.declining-balance method. c.sum-of-the-years'-digit method. d.units-of-production method.arrow_forwardBlueprint Connection: Depreciation Methods Depreciation is the process of allocating the cost of an asset to expense over the asset's estimated useful life. The amount depreciated is the cost of the asset less the asset's expected residual value. An accelerated depreciation method allocates larger amounts of depreciation expense to earlier periods of an asset’s life and smaller amounts of depreciation expense to later periods of an asset’s life. Straight-line depreciation allocates an equal amount of the asset’s cost to depreciation expense for each year of the asset’s useful life. Units-of-production depreciation is used primarily to depreciate machinery and allocates costs based on the actual use of the machine to produce product. While these methods allocate a different amount of depreciation expense to each year of an asset’s life, the total amount of depreciation expense recognized over the asset’s life is the same under either method. Select the depreciation method…arrow_forward
- Which method almost always produces the most depreciation in the first year? a. Units-of-production b. Straight-line c. Double-declining-balance d. All produce the same depreciation in the first year.arrow_forwardWhich of the following best describes an accelerated depreciation method? A. A method by which an equal amount of expense is assigned for every full year of use. B. A method by which depreciation is based on the level of actual usage rather than the passage of time. C. A method of determining depreciation which assigns larger expenses to the initial years of an asset’s service and smaller expenses to the later years. D. A method of allocating the cost of a wasting asset to expense over the periods during which the value is removed from the property.arrow_forwardWhich of the following depreciation methods will result in the most depreciation expense over the life of an asset? Select one: a. Double-declining balance method b. All three methods will result in the same amount of depreciation expense. c. Units-of-production method d. Straight-line method e. Cannot be determined from the information given.arrow_forward
- The depreciation method which uses a depreciation rate that is a multiple of the straight-line rate is called: Multiple Choice Units-of-production depreciation. Modified accelerated cost recovery system (MACRS) depreciation. Declining-balance depreciation. Book value depreciation. Amortization.arrow_forwardThe straight-line depreciation method and the double-declining-balance depreciation method: Group of answer choices Produce the same depreciation expense each year. Produce the same total depreciation over an asset's useful life. Produce the same book value each year. Are the only acceptable methods for calculating depreciation expense.arrow_forwardWhich of the statements is incorrect concerning the depreciation methods? * a. Under the output method, the cost per unit of production is constant. b. The straight-line method is particularly appropriate where the asset is expected to decline in usefulness as a function of time and the expected use pattern of the asset is fairly constant over time. c. The sum of the years' digits method provides for a decreasing depreciation charge. d. First-year depreciation under the double declining balance method is computed as the depreciable amount multiplied by double the straight line rate. . None of the choices is incorrectarrow_forward
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