Acct 220 Principles of Accounting I Quiz 3

ACCT 220 Principles of Accounting I Quiz 3  


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Multiple Choice (7 points each)

1. On January 1, 20X1, Blake Company purchased a patent for $68,000. The   patent has a remaining legal life of nine years and an expected service life of eight years.   The amortization expense (to the nearest dollar) properly recognized for 20X1 is:$0.
B.   $3,400.
C.   $7,556.
D.   $8,500.
E.   None of these.

2. Which of the following transactions would cause a change in total stockholders’ equity?

1. A stock dividend.
2. Paying a previously declared cash dividend.
3. Reissuing treasury stock at its cost.
4. A stock split.
5. None of these.

3. Normally, the payment of a previously declared dividend will result in:

1. a decrease in liabilities.
2. a decrease in working capital.
3. a decrease in stockholders’ equity.
4. All of the above.
5. None of these.



Problem #1 (15 points)
Hogan Company sold equipment for $6,000 which cost $8,000 and had accumulated depreciation of $5,500.   What is the proper journal entry to record this transaction?










Problem #2 (15 points)
Hector Company sold equipment, for $1,000 which cost $8,000 and had accumulated depreciation of $5,500.   What is the proper journal entry to reflect this transaction?






Problem #3 (15 points)
Gaines originally issued 15,000 shares of $10 par value common stock at $15 per share.   During the current year, 1,000 of these shares were reacquired for $20 each.   What is the proper journal entry to record the reacquisition?





Problem #4 (34 points)
On January 1, 2015 Jett Inc. purchased equipment for $154,000 in cash.   The equipment is expected to have an operating life of 4 years. The estimated salvage value is $25,000.

Required:
1. Using the straight-line method of depreciation:
2016. Determine the annual depreciation expense...