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1.

Ron’s Quik Shop bought equipment for $140,000 on January 1, 2021. Ron estimated the useful life to be 5 years with no salvage value, and the straight-line method of depreciation will be used. On January 1, 2022, Ron decides that the business will use the equipment for a total of 6 years. What is the revised depreciation expense for 2022?

A. $18,666
B. $11,200
C. $28,000
D. $22,400

2.

On January 1, a machine with a useful life of five years and a salvage value of $25,000 was purchased for $125,000. What is the depreciation expense for year 2 under straight-line depreciation?

A. $15,000
B. $60,000
C. $20,000
D. $75,000

3.

Machinery was purchased for $340,000. Freight charges amounted to $14,000 and there was a cost of $40,000 for building a foundation and installing the machinery. It is estimated that the machinery will have a $60,000 salvage value at the end of its 5-year useful life. Depreciation expense each year using the straight-line method will be

A. $66,800.
B. $57,200.
C. $78,800.
D. $56,000.

4.

An asset was purchased for $400,000. It had an estimated salvage value of $80,000 and an estimated useful life of 10 years. After 5 years of use, the estimated salvage value is revised to $64,000 but the estimated useful life is unchanged. Assuming straight-line depreciation, depreciation expense in Year 6 would be

A. $33,600.
B. $35,200.
C. $48,000.
D. $24,000.

5.

Which of the following is not an advantage of leasing a long-term asset?

A. reduced risk of obsolescence
B. no depreciation
C. shared tax benefits
D. lower down payment
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