Merl Buys a Tablet for $500, Running Shoes for $200

question 43

Multiple Choice

Merl buys a tablet for $500, running shoes for $200, and a set of the Game of Crowns books for $100. To be enforceable as a contract, a writing is required for the purchase of

• A)the books, the shoes, and the tablet.
• B)the shoes and the tablet only.
• C)the tablet only.
• D)the books only.

Identify the factors affecting the calculation of depreciation expense.

Calculate depreciation expense using different methods: straight-line, double-declining-balance, and units-of-activity.

Analyze the impact of changes in estimates (useful life and salvage value) on depreciation expense.

Determine the book value and accumulated depreciation of an asset.

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Definitions:

Amortization of Bond

The gradual reduction of the book value of a bond payable account through regular payments over the life of the bond.

Gain on Sale

The profit realized from the sale of assets when the selling price exceeds the book value.

Noncurrent Assets

Assets not expected to be converted into cash, sold, or consumed within one year or the operating cycle, whichever is longer; includes property, plant, and equipment.

Amortization of Discount

The gradual reduction of a bond discount over the life of the bond, effectively increasing the bond's book value to its face value at maturity.