1) Nelson Ma purchased equipment at the beginning of July 2015 for $200,000. Nelson decided to depreciate the equipment over a ten-year period using the reducing-balance method (using 1.8 times the straight line rate). Nelson estimated the equipment’s residual value at $10,000. Which of the following statements is correct concerning Nelson’s financial statements at 30 June 2016?
a. The carrying amount of the equipment is $120,000
b.The carrying amount of the equipment is $165,800
c. The total accumulated depreciation is $90,000
d. Depreciation expense for 2015 is $32,001
2) Wong and White are partners. They have agreed to share profits based on a formula where the first $100 000 is based on service and Wong is to receive $60 000 and White $40 000. The next $100 000 is based on capital contributed where Wong invested $350 000 and White $150 000. Any remaining profits are shared equally.
If profits before distributions were $650 000 how much will White receive?
b. $75 000
c. $70 000
d. $295 000
3) Matt purchased equipment at the beginning of July 2015 for $21 000. Matt decided to depreciate the equipment over a five year period using the straightline method. Matt estimated the equipment’s residual value at $2 000. The estimated fair market value at the end of June 2016 was $20 000. Which of the following statements is correct concerning Matt’s financial statements at 30 June 2016?
a.The carrying amount of the equipment $16,200
b. The carrying amount of the equipment is $17,000
c. The total accumulated depreciation is $3,800
d.The equipment will be reported on the statement of financial position at its fair market value of $20,000
4)Chelsea, Brown and Easton (S, B & E) are partners with capital balances of $5 000, $4 000 and $2 000 respectively and S, B &E share profits and losses 50 per cent, 25 per cent and 25 per cent respectively. Before Easton’s withdrawal the assets are revalued downwards by $200. The journal entry to account for the downward revaluation would include:
a. Debit accumulated depreciation $200.00
b.debit Easton, capital $50.00
c.debit Brown, capital $66.67
d. credit Chelsea, capital $100.00