FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 9: Long-Term Assets: Fixed and Intangible

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 111

Multiple Choice

Review LaterAdd Note

Review Later

The calculation for annual depreciation using the double-declining balance method is

A) Initial cost / (Estimated useful life × 2)
B) Depreciable cost / (Estimated useful life × 2)
C) Depreciable cost × (Estimated useful life / 2)
D) Initial cost × (Estimated useful life / 2)

E) None of the above
F) C) and D)

Correct Answer

verified

Show Answer

Question 112

Multiple Choice

Review LaterAdd Note

Review Later

Loss on Disposal of Asset

A) Current Assets
B) Fixed Assets
C) Intangible Assets
D) Current Liability
E) Long-Term Liability
F) Owners' Equity
G) Revenues
H) Operating Expenses
I) Other Income/Expense

J) A) and B)
K) None of the above

Correct Answer

verified

Show Answer

Question 113

Multiple Choice

Review LaterAdd Note

Classify each of the following costs associated with long-lived assets as one of the following: -Cost of installing new equipment

A number of major structural repairs completed at the beginning of the current fiscal year at a cost of $1,000,000 are expected to extend the life of a building 10 years beyond the original estimate. The original cost of the building was $6,552,000, and it has been depreciated by the straight-line method for 25 years. Estimated residual value is negligible and has been ignored. The related accumulated depreciation account after the depreciation adjustment at the end of the preceding fiscal year is $4,550,000. (a) What has the amount of annual depreciation been in past years? (b) What was the original life estimate of the building? (c) To what account should the $\$ 1,000,000$ be debited? (d) What is the book value of the building after the extraordinary repairs have been made? (e) What is the expected remaining life of the building after the extraordinary repairs have been made? (f) What is the amount of straght-line depreciation for the current year, assuming that the repairs were completed at the very beginning of the current year? Round to the nearest dollar.

Classify each of the following costs associated with long-lived assets as one of the following: -Costs of government permits required to develop land for a new business location

The book value of a fixed asset reported on the balance sheet represents its market value on that date.

Accumulated Depreciation

A fixed asset with a cost of $41,000 and accumulated depreciation of $36,000 is traded for a similar asset priced at $50,000 (fair market value) in a transaction with commercial substance. Assuming a trade-in allowance of $4,000,at what cost will the new equipment be recorded in the books?

Financial statement data for the years ended December 31 for Parker Corporation are as follows: ​ $\begin{array}{lrr} & \text { Current Year } & \text { Prior Year } \\\text { Sales } & \$ 2,595,600 & \$ 2,409,498\\\text { Fixed assets (net): }\\\text { Beginning of the year } & \$ 901,070 & \$ 820,000 \\\text { End of the year } & 829,330 & 901,070\end{array}$ ​ (a) Determine the fixed asset turnover for the current and prior years. (b) Does the change in fixed asset turnover from the prior year to the current year indicate a favorable or unfavorable trend?

Machinery was purchased on January 1 for $51,000. The machinery has an estimated life of 7 years and an estimated salvage value of $9,000. Double-declining-balance depreciation for the second year would be (round calculations to the nearest dollar) :

Equipment purchased at the beginning of the fiscal year for $360,000 is expected to have a useful life of 5 years, or 14,000 operating hours, and a residual value of $10,000. Compute the depreciation for the first and second years of use by each of the following methods: ​

On July 1, Hartford Construction purchases a bulldozer for $228,000. The equipment has a 9-year life with a residual value of $16,000. Hartford uses the units-of-output method of depreciation, and the bulldozer is expected to yield 26,500 operating hours. (a) Calculate the depreciation expense per hour of operation. (b) The bulldozer is operated 1,250 hours in the first year, 2,755 hours in the second year, and 1,225 hours in the third year of operations. Journalize the depreciation expense for each year. ​

Classify each of the following costs associated with long-lived assets as one of the following: -Interest on money borrowed to finance construction of new office building

The amount of depreciation expense for the first full year of use of a fixed asset costing $95,000, with an estimated residual value of $5,000 and a useful life of 5 years, is $19,000 by the straight-line method.

Newport Company has sales of $2,025,000 for the current year. The book value of its fixed assets at the beginning of the year was $550,000 and at the end of the year was $800,000. The fixed asset turnover ratio for Newport is

Equipment was purchased on January 5, year 1, at a cost of $90,000. The equipment had an estimated useful life of 8 years and an estimated residual value of $8,000. After using the equipment for 3 years, the useful life was revised to a total of 10 years and the residual value was reduced to $2,004. Determine the straight-line depreciation expense for the Year 4 and following years.

XYZ Co. incurred the following costs related to the office building used in operating its sports supply company: ​ Which expenditures would be classified as capital expenditures?

Standby equipment held for use in the event of a breakdown of regular equipment is reported as property, plant, and equipment on the balance sheet.

Functional depreciation occurs when a fixed asset is no longer able to provide services at the level for which it was intended.

Equipment with a cost of $220,000 has an estimated residual value of $30,000 and an estimated life of 10 years or 19,000 hours. It is to be depreciated by the straight-line method. What is the amount of depreciation for the first full year, during which the equipment was used 2,100 hours?