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 21

Multiple Choice

Review LaterAdd Note

Review Later

The formula for depreciable cost is

A) initial cost + residual value
B) initial cost - residual value
C) initial cost - accumulated depreciation
D) depreciable cost = initial cost

E) All of the above
F) None of the above

Correct Answer

verified

Show Answer

Question 22

True/False

Review LaterAdd Note

Review Later

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) True
B) False

Correct Answer

verified

Show Answer

Question 23

Essay

Review LaterAdd Note

On July 1, 2010, Howard Co. acquired patents rights for $40,000. The patent has a useful life of 8 years and a legal life of 15 years. Journalize the adjusting entry on December 31, 2010 to recognize the amortization. Journal

XYZ Co. incurred the following costs related to the office building used in operating its sports supply company: a.Replaced a broken window. b.Replaced the rof that had been on the building 23 years. c.Serviced all the air conclitioners before sumuner started. d.Replaced the air conditionerswith refrigerated air conditioners in the customer service areas. e.Added a warehouse to the back of the building. f.Repainted the interior walls. g.Installed window shutters on all windows. Classify each of the costs as a capital expenditure or a revenue expenditure. For those costs identified as capital expenditures, classify each as an additional or replacement component.

The double declining balance depreciation method calculates depreciation each year by taking twice the straight line rate times the book value of the asset at the beginning of each year.

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: (a)straight-line (b)declining-balance at twice the straight-line rate (c)units-of-production (used for 1,600 hours during the current year) (Round the answer to the nearest dollar.)

A gain can be realized when a fixed asset is discarded.

Equipment acquired at a cost of $126,000 has a book value of $42,000. Journalize the disposal of the equipment under the following independent assumptions. Journal

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

Computer equipment was acquired at the beginning of the year at a cost of $65,000 that has an estimated residual value of $3,000 and an estimated useful life of 5 years. Determine the 2nd year's depreciation using straight-line depreciation.

On December 31, Strike Company has decided to sell one of its batting cages. The initial cost of the equipment was $215,000 with an accumulated depreciation of $185,000. Depreciation has been taken up to the end of the year. The company found a company that is willing to buy the equipment for $30,000. What is the amount of the gain or loss on this transaction?

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)Whathas the amount of anmual depreciation been in past years? (b)What was the original life estimate of the builcing? (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 amoun of straight-line depreciation for the current year; assuning that the repairs were completed at the very beginring of the current year? Round to the nearest dollar.

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

On December 31, Strike Company has decided to sell one of its batting cages. The initial cost of the equipment was $215,000 with an accumulated depreciation of $185,000. Depreciation has been taken up to the end of the year. The company found a company that is willing to buy the equipment for $20,000. What is the amount of the gain or loss on this transaction?

Expenditures that add to the utility of fixed assets for more than one accounting period are

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.

The amount of the depreciation expense for the second full year of use of a fixed asset costing $100,000, with an estimated residual value of $5,000 and a useful life of 4 years, is $25,000 by the declining-balance method at twice the straight-line rate.

If a fixed asset with a book value of $10,000 is traded for a similar fixed asset, and a trade-in allowance of $15,000 is granted by the seller, if the transaction is deemed to have commercial substance, the buyer would report a gain on disposal of fixed assets of $5,000.

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

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