A company recently purchased a warehouse property and related equipment （shelving, fork

A company has announced that it is going to distribute a group of long-lived assets to its owners in a spin-off.The most appropriate way to account for the assets until the distribution occurs is to classify them as:

A.held for sale with no depreciation taken.

B.held for use until disposal with no deprecation taken.

C.held for use until disposal with depreciation continuing to be taken.

Hadinoto Enterprises Inc.(HEI) purchased equipment for $400,00 on January 1, 20x5.The equipment has a 4 year life and no salvage value.HEI estimates that the equipment will be used to produce the following units of inventory:

To maximize profit margin for 20x5, the depreciation method HEI will use is :

A.Straight-line

B.Units of production.

C.Double-declining balance.

During the early years of an asset’s life, a company using an accelerated depreciation method, rather than straight-line, could expect a lower value for:

A.Asset turnover.

B.Shareholders’ equity.

C.Asset turnover and shareholders’ equity.

A company purchases a piece of equipment costing $7,000,000 that it expects will have a useful life of 5 years and a salvage value of $600,000.Assuming that the company uses double-declining-balance depreciation method rather than straight-line depreciation methods, the third-year depreciation expense difference and EBIT will be:

A.$272,000 and the EBIT is higher using DDB.

B.$400,000 and the EBIT is lower using DDB.

C.$675,200 and the EBIT is higher using DDB.