答案和详解如下： 11.Rasmus Company purchased equipment for $96,000. The estimated useful life is three years, and it is expected to have a salvage value of $24,000 at the end of its useful life. The depreciation in the third year was $12,000. What method of depreciation did Rasmus most likely use? A) Sum-of-years digits. B) Straight Line. C) Double-declining balance. D) Units of Production method. The correct answer was A) $96,000 – 24,000 = $72,000. Sum-of-years digits = 3+2+1 = 6. The third year depreciation will be $72,000 × (1/6) = $12,000. SL depreciation would be $24,000/year. DDB would be $64,000 in year 1, $8,000 in year 2, and $0 in year 3. 12.In its first year of business, Digmore Corporation’s balance sheet shows gross fixed assets at $90 million and accumulated depreciation of $10 million. If the estimated salvage value of these assets is $10 million, and the original estimated useful life is 8 years, what method of depreciation did Digmore most likely use? A) Sum-of-years digits. B) Double-declining balance. C) Units of production. D) Straight Line. The correct answer was D) $90 – $10 million = $80 million; $80 million/8 = $10 million depreciation per year under SL depreciation. 13.Ralph & Sons, Inc., uses the straight-line method of depreciation for its long-lived assets. After a recent meeting with the independent accountants where industry depreciation practices were discussed, Ralph decided to switch to the double-declining balance method. In the year in which the switch occurs, Ralph should report this change as: A) a change in accounting principle and report its effect on prior period results as a non-recurring item, net of tax. B) an accounting error and directly adjust retained earnings. C) a change in accounting principle and report its effect on prior earnings as part of operating earnings. D) a change in accounting estimate that will be incorporated in current and future financial reports. The correct answer was A) Under GAAP, a change in the method of depreciation is considered a change in accounting principle and hence the effects on prior period earnings will have to be disclosed as a non-recurring item, net of tax. 14.Which of the following statements about capitalizing expenses and depreciation is most accurate? A) The capitalization of an expenditure (instead of expensing it immediately) will result in a higher debt/equity ratio. B) The capitalization of a marketing expenditure (instead of expensing it immediately) will result in an increase in fixed asset turnover ratio. C) The sum-of-years-digits depreciation method charges the largest amount of depreciation in the first year and then decreases at a declining rate each subsequent year. D) The sum-of-years-digits depreciation method charges the largest amount of depreciation in the first year and then decreases by a constant amount each subsequent year. The correct answer was D) The sum-of-years digits method depreciation decreases each year by (1 / sum-of-years digits). For example, for a three-year property, the first-year depreciation is 3/6, the second-year depreciation is 2/6, and the third-year depreciation is 1/6. Each year depreciation decreases by a constant amount—one-sixth of the depreciable cost of the asset. Capitalizing an expenditure instead of expensing it will result in a lower debt to equity ratio because the amount of capitalized expenses is added to assets which also increases equity by increasing net income and retained earnings. Also, capitalizing expenses will lower the fixed asset turnover ratio since assets are increased and they are also in the denominator of the fixed asset turnover ratio. 15.Which of the following statements about depreciation is TRUE? A) Straight line depreciation yields a decreasing rate of return over the life of the asset. B) The total depreciation expense calculated with the sum of the years digits method is greater than that given by using the straight-line method. C) The initial tax savings created by using accelerated depreciation rather than straight-line depreciation is a deferral because a greater tax payment will be required at the end of the asset's life. D) All of these are correct. The correct answer was C) In the early years of the asset's life the increased depreciation will decrease earnings and therefore taxes will be less. In the later years of the asset's life depreciation expense will decrease, income will increase, and taxes will increase. | 
发表于 2008-4-17 15:56
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