Equipment cost $300,000, has no residual value, and was originally depreciated straight-line over 10 years. After four full years, its remaining useful life is revised to three years. What depreciation is recorded in year 5?
A. $30,000
B. $50,000
C. $60,000
D. $100,000
Source: Paragraphs 83–89, recognition and allocation across periods -- https://storage.fasb.org/Concepts_Statement_5_As_Amended.pdf
Equipment costing $180,000 with accumulated depreciation of $126,000 is sold for $61,000 cash. What gain or loss is recognized?
A. $7,000 loss
B. $54,000 gain
C. $61,000 gain
D. $7,000 gain
Source: Chapter 4, paragraphs E16–E22 and E81–E89, derecognition and gains -- https://storage.fasb.org/Concepts_Statement_8-Chapter_4-Elements.pdf
A lessee will make three year-end payments of $20,000. The present-value factors at commencement are 0.943, 0.890, and 0.840. Ignoring initial direct costs and incentives, what initial lease liability is recognized?
A. $53,460
B. $56,600
C. $60,000
D. $50,400
Source: ASC 842 lessee amendments applicable to Initial lease liability -- https://storage.fasb.org/ASU%202016-02_Section%20A.pdf
A finance lease liability is $90,000 at the start of the year and the effective annual rate is 6%. A $24,000 payment is made at year-end. What portion of that payment is interest?
A. $1,440
B. $5,400
C. $18,600
D. $24,000
Source: ASC 842 lessee amendments applicable to Finance lease interest -- https://storage.fasb.org/ASU%202016-02_Section%20A.pdf
A company begins the year with accumulated other comprehensive income of $18,000 credit. Current-year OCI is a $7,000 loss and there are no reclassifications. What ending AOCI is reported?
A. $25,000 credit
B. $11,000 credit
C. $7,000 debit
D. $11,000 debit
Source: Paragraphs 42–44 and 56–62, comprehensive income and accumulation in equity -- https://storage.fasb.org/Concepts_Statement_5_As_Amended.pdf
