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Exam 10: Long-Term Assets: Fixed and Intangible

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Question 61

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Both the initial cost of the asset and the accumulated depreciation will be taken off the books with the disposal of the asset.

A) True
B) False

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Question 62

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Regardless of the depreciation method,the amount that will be depreciated during the life of the asset will be the same.

A) True
B) False

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Question 63

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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.

Xtra Company purchased a business from Argus for $96,000 above the fair value of its net assets.Argus had developed the goodwill over 12 years.How much would Xtra amortize the goodwill for its first year?

A fixed asset with a cost of $41,000 and accumulated depreciation of $36,500 is traded for a similar asset priced at $60,000.Assuming a trade-in allowance of $3,000,the recognized loss on the trade is

Computer equipment was acquired at the beginning of the year at a cost of $63,000 that has an estimated residual value of $3,000 and an estimated useful life of five years.Determine the (a)depreciable cost (b)double-declining-balance rate,and (c)double-declining-balance depreciation for the first year.

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 five years,is $19,000 by the straight-line method.

The depreciable cost of a building is the same as its acquisition cost.

Capital expenditures are costs that improve a fixed asset or extend its useful life.

Falcon Company acquired an adjacent lot to construct a new warehouse,paying $40,000 and giving a short-term note for $410,000.Legal fees paid were $13,275,delinquent taxes assessed were $14,500,and fees paid to remove an old building from the land were $15,800.Materials salvaged from the demolition of the building were sold for $6,800.A contractor was paid $890,000 to construct the new warehouse.Determine the cost of the land to be reported on the balance sheet and show your work.

The term applied to the amount of cost to transfer to expense resulting from a decline in the utility of intangible assets is

Once the useful life of a depreciable asset has been estimated and the amount to be depreciated each year has been determined,the amounts cannot be changed.

The accumulated depletion account is

On December 31,Strike Company sold one of its batting cages for $50,000.The equipment had an original cost of $310,000 and has accumulated depreciation of $260,000.Depreciation has been recorded up to the end of the year.What is the amount of the gain or loss on this transaction?

Classify each of the following costs associated with long-lived assets as one of the following: -Cost of removing an existing building to ready land for use as a new business site

An asset was purchased for $58,000 and originally estimated to have a useful life of 10 years with a residual value of $3,000.After two years of straight-line depreciation,it was determined that the remaining useful life of the asset was only two years with a residual value of $2,000. (a)Determine the amount of the annual depreciation for the first two years. (b)Determine the book value at the end of Year 2. (c)Determine the depreciation expense for each of the remaining years after revision.

Classify each of the following costs associated with long-lived assets as one of the following: -Repairs made to used office equipment

When depreciation estimates are revised,all years of the asset's life are affected.

The process of transferring the cost of metal ores and other minerals removed from the earth to an expense account is called

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