FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 9: Fixed Assets and Intangible Assets

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 1

Multiple Choice

Review LaterAdd Note

Review Later

A used machine with a purchase price of $77,000, requiring an overhaul costing $8,000, installation costs of $5,000, and special acquisition fees of $3,000, would have a cost basis of

A) $93,000
B) $90,000
C) $82,000
D) $85,000

E) C) and D)
F) A) and B)

Correct Answer

verified

Show Answer

Question 2

Essay

Review LaterAdd Note

Review Later

On the first day of the fiscal year, a new walk-in cooler with a list price of $58,000 was acquired in exchange for an old cooler and $44,000 cash. The old cooler had a cost of $25,000 and accumulated depreciation of $16,000. Assume the transaction has commercial substance. a) Determine the gain to be recorded on the exchange. b)Journalize the entry to record the exchange.

Correct Answer

verified

Show Answer

Question 3

Essay

Review LaterAdd Note

Machinery is purchased on July 1 of the current fiscal year for $240,000. It is expected to have a useful life of 4 years, or 25,000 operating hours, and a residual value of $15,000. Compute the depreciation for the last six months of the current fiscal year ending December 31 by each of the following methods:

When a company sells machinery at a price equal to its book value, this transaction would be recorded with an entry that would include the following:

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. For financial reporting purposes, present entries to record the disposition of the old machinery and the acquisition of new machinery under each of the following assumptions:

Golden Sales has bought $135,000 in fixed assets on January 1st associated with sales equipment. The residual value of these assets is estimated at $10,000 after they service their 4 year service life. Golden Sales managers want to evaluate the options of depreciation. (a) Compute the annual straight-line depreciation and provide the sample depreciation journal entry to be posted at the end of each of the years. (b) Write the journal entries for each year of the service life for these assets using the double- declining balance method.

The Weber Company purchased a mining site for $1,750,000 on July 1, 2014. The company expects to mine ore for the next 10 years and anticipates that a total of 400,000 tons will be recovered. The estimated residual value of the property is $150,000. During 2014 the company extracted 6,500 tons of ore. The depletion expense for 2014 is

Though a piece of equipment is still being used, the equipment should be removed from the accounts if it has been fully depreciated.

Long lived assets held for sale are classified as fixed assets.

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:

When a company replaces a component of property, plant and equipment, which statement below does not account for one of the steps in the process?

A copy machine acquired on March 1, 2011 with a cost of $1,410 has an estimated useful life of 3 years. Assuming that it will have a residual value of $150, determine the depreciation for the first and second year by the straight-line method.

Equipment with a cost of $160,000, an estimated residual value of $40,000, and an estimated life of 15 years was depreciated by the straight-line method for 4 years. Due to obsolescence, it was determined that the useful life should be shortened by 3 years and the residual value changed to zero. The depreciation expense for the current and future years is

When old equipment is traded in for a new equipment, the difference between the list price and the trade in allowance is called boot.

A capital lease is accounted for as if the asset has been purchased.

Xtra Company purchased goodwill from Argus for $96,000. Argus had developed the goodwill over 12 years. How much would Xtra amortize the goodwill for its first year?

When land is purchased to construct a new building, the cost of removing any structures on the land should be charged to the building account.

When the amount of use of a fixed asset varies from year to year, the method of determining depreciation expense that best matches allocation of cost with revenue is

The depreciation method that does not use residual value in calculating the first year's depreciation expense is

Identify the following as a Fixed Asset , or Intangible Asset , or Natural Resource or Neither.