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Exam 10: Long-Term Assets: Fixed and Intangible

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Question 81

Multiple Choice

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

A) Land improvements
B) Buildings
C) Land
D) Machinery and equipment

E) All of the above
F) B) and C)

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Question 82

True/False

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When a plant asset is traded for another similar asset,losses on the asset traded are not recognized.

A) True
B) False

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Question 83

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The cost of computer equipment does not include the consultant's fee to supervise installation of the equipment.

The double-declining-balance method of depreciation uses a declining percentage rate in determining the depreciation amount.

Classify each of the following as: -Resurfacing a pool in an apartment building

As a company records depreciation expense for a period of time,cash is accumulated to replace fixed assets as they wear out.

Residual value is also known as all of the following except

The following information was taken from a recent annual report of Harrison Company (in millions):​ Required

The method of determining depreciation that yields successive reductions in the periodic depreciation charge over the estimated life of the asset is the

The entry to record the disposal of fixed assets will include a credit to Accumulated Depreciation.

An exchange is said to have commercial substance if future cash flows remain the same as a result of the exchange.

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

Classify each of the following costs associated with long-lived assets as one of the following: -Sales taxes paid on new factory equipment

Match each account name to the financial statement section (a-i) in which it would appear. -Amortization Expense

When a company discards machinery that is fully depreciated,this transaction would be recorded as a

Machinery acquired at a cost of $80,000 and on which there is accumulated depreciation of $55,000 (including depreciation for the current year to date)is exchanged for similar machinery.Assume that the transaction has commercial substance.For financial reporting purposes,present entries to record the exchange of the machinery under each of the following assumptions:

Match the intangible assets described with their proper classification (a-d) . ​ -iTunes music

Sands Company purchased mining rights for $500,000.It expects to harvest 1 million tons of ore over the next five years.During the current year,Sands mined 350,000 tons of ore.The entry to record the depletion would include a

Match the intangible assets described with their proper classification (a-d) . ​ -Location of a company

The cost of new equipment is called a revenue expenditure because it will help generate revenues in the future.