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Exam 9: Reporting and Interpreting Long-Lived Tangible and Intangible Assets

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Question 21

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The exclusive right to use a certain name or symbol is called a trademark.

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Question 22

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A machine is purchased on January 1, 2011, for $90,000. It is expected to have a useful life of five years and a residual value of $5,000. The company closes its books on December 31. Under the double-declining balance method, what is the total amount of depreciation to be expensed during the 2012 fiscal year (year 2 of 5) ?

A) $21,600
B) $22,000
C) $22,400
D) $34,000

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Question 23

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Darin Company purchased a truck and trailer for $54,000. The appraised values of the truck and trailer are $19,000 and $38,000, respectively. What is the amount of the cost that should be assigned to the truck?

The fixed asset turnover is the

The periodic allocation of a natural resource's cost over the period of its extraction or harvesting is called amortization.

What is the depreciation expense for 2011?

The balance sheet category "intangible assets" includes

Some analysts compare companies by focusing on earnings before interest, taxes, depreciation, and amortization (EBITDA).

Which of the following statements regarding impairment is correct?

Your company rents out computers to local businesses and schools. You have 1,000 computers with a net book value of $160,000. As a result of changing technology, your computers are more difficult to rent so you must severely reduce your rental price, which causes a decrease in estimated future cash flows. The fair value of the computers is estimated to be $125,000 because of their outdated technology. Your company should report an asset impairment loss of:

On September 1, a company purchased a vehicle for $23,000 with a residual value of $3,000. The estimated useful life is 5 years and the company uses the straight-line method. What is the depreciation expense for the year ended December 31?

Assuming two companies use the same accounting methods, other things being equal, the company with a higher fixed asset turnover ratio:

The net amount shown on a balance sheet for an intangible asset with an unlimited life should be:

A trucking company sold its fleet of trucks for $55,000. The trucks had originally cost $1,410,000 and had accumulated depreciation of $1,269,000 through the date of disposal. What gain or loss did the trucking company record when it sold the fleet of trucks?

A company purchased land for its natural resources at a cost of $1,500,000. It expects to mine 2,000,000 tons of ore from this land. The residual value of the land is estimated to be $250,000. What is the amount of depletion per ton of ore?

An asset is purchased on January 1 for $40,000. It is expected to have a useful life of five years after which it will have an expected salvage value of $5,000. The company uses the straight -line method. If it is sold for $30,000 exactly two years after its purchased, the company will record a:

Purrfect Pets has a facility that originally cost $375,000. The balance of the accumulated depreciation account for the facility is $258,000. The company expects to be able to sell the facility for $107,000 at the end of its useful life. The residual value of the facility is:

One difference between the double-declining-balance method and the straight-line method is that the double-declining-balance method:

If a truck's engine is overhauled for $8,000, the journal entry would normally include a debit to

The Widget Tool and Die Company buys a $400,000 stamping machine that has an estimated residual value of $20,000. The company expects the machine to produce two million units. It makes 400,000 units during the current period. If the units-of-production method is used, the depreciation rate is: