Question 1 - McDonald's Corporation reports total average assets of $28.9 billion and net sales of $20.5 billion. What is the company's asset turnover?

Question 2 - The following expenditures were incurred by McCoy Company in purchasing land: cash price $68,000, accrued taxes $3,500, attorneys' fees $4,200, real estate broker's commission $1,000, and clearing and grading $3,800. What is the cost of the land?

Question 3 - Corales Company acquires a delivery truck at a cost of $45,000. The truck is expected to have a salvage value of $17,000 at the end of its 8-year useful life.

Compute annual depreciation expense for the first and second years using the straight-line method.

Question 4 - Corales Company acquires a delivery truck at a cost of $77,000. The truck is expected to have a salvage value of $7,000 at the end of its 5-year useful life. Assuming the declining-balance depreciation rate is double the straight-line rate, compute annual depreciation for the first and second years under the declining-balance method.

Question 5 - Rosco Taxi Service uses the units-of-activity method in computing depreciation on its taxicabs. Each cab is expected to be driven 141,000 miles. Taxi no. 10 cost $32,000 and is expected to have a salvage value of $330. Taxi no. 10 is driven 35,900 miles in year 1 and 25,400 miles in year 2.

Calculate depreciation cost per mile using unit-of-activity method.

Compute the depreciation for each year.

Question 6 - In recent years, Avery Transportation purchased three used buses. Because of frequent turnover in the accounting department, a different accountant selected the depreciation method for each bus, and various methods were selected. Information concerning the buses is summarized as follows.

For the declining-balance method, the company uses the double-declining rate. For the units-of-activity method, total miles are expected to be 119,000. Actual miles of use in the first 3 years were 2016, 26,500; 2017, 32,000; and 2018, 29,000.

For Bus #3, calculate depreciation expense per mile under units-of-activity method.

Compute the amount of accumulated depreciation on each bus at December 31, 2017.

If Bus 2 was purchased on April 1 instead of January 1, what is the depreciation expense for this bus in (1) 2015 and (2) 2016?

Question 7 - At December 31, 2017, Grand Company reported the following as plant assets.

During 2018, the following selected cash transactions occurred.

April 1 - Purchased land for $2,140,000.

May 1 - Sold equipment that cost $930,000 when purchased on January 1, 2014. The equipment was sold for $558,000.

June 1 - Sold land purchased on June 1, 2008 for $1,590,000. The land cost $402,000.

July 1 - Purchased equipment for $2,480,000.

Dec. 31 - Retired equipment that cost $517,000 when purchased on December 31, 2008. No salvage value was received.

Journalize the above transactions. The company uses straight-line depreciation for buildings and equipment. The buildings are estimated to have a 50-year life and no salvage value. The equipment is estimated to have a 10-year useful life and no salvage value. Update depreciation on assets disposed of at the time of sale or retirement.

Record adjusting entries for depreciation for 2018.

Prepare the plant assets section of Grand's balance sheet at December 31, 2018.

Question 8 - Ceda Co. has equipment that cost $78,300 and that has been depreciated $50,300.

Record the disposal under the following assumptions.

(a) It was scrapped as having no value.

(b) It was sold for $22,200.

(c) It was sold for $29,500.

Question 9 - The intangible assets section of Sappelt Company at December 31, 2017, is presented below.

The patent was acquired in January 2017 and has a useful life of 10 years. The franchise was acquired in January 2014 and also has a useful life of 10 years. The following cash transactions may have affected intangible assets during 2018.

Jan. 2 - Paid $31,500 legal costs to successfully defend the patent against infringement by another company.

Jan.-June - Developed a new product, incurring $148,000 in research and development costs. A patent was granted for the product on July 1. Its useful life is equal to its legal life.

Sept. 1 - Paid $54,000 to an extremely large defensive lineman to appear in commercials advertising the company's products. The commercials will air in September and October.

Oct. 1 - Acquired a franchise for $142,000. The franchise has a useful life of 50 years.

Prepare journal entries to record the transactions above.

Prepare journal entries to record the 2018 amortization expense.

Prepare the intangible assets section of the balance sheet at December 31, 2018.