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Exam 9: Reporting and Analyzing Long-Lived Assets

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Question 1

True/False

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Using the units-of-production method of depreciation for equipment will generally result in more depreciation expense being recorded over the life of the asset than if the straight-line method had been used.

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Question 2

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A truck was purchased for $40,000 and it was estimated to have a $4,000 residual value.Using the straight-line method, monthly depreciation expense of $600 was recorded.Therefore, the annual depreciation rate expressed as a percentage is

A) 2%.
B) 17%.
C) 18%.
D) 20%.

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Question 3

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Use the following information for questions On January 1, 2022, Flowers Unlimited purchased a new delivery van.The van cost $35,000 with an estimated life of 5 years and $5,000 residual value.Double diminishing-balance depreciation will be used. -What is the balance in the Accumulated Depreciation account at the end of 2023?

Equipment was purchased for $25,000.Freight charges amounted to $700 and there was a cost of $3,000 for building a foundation and installing the equipment.It is estimated that the equipment will have a $1,600 residual value at the end of its 5-year useful life.Using the straight-line method, annual depreciation expense will be

The cost of a finite intangible asset is

In calculating depreciation, cost, useful life, and residual value are all based on estimates.

Cordo Ltd.uses the units-of-production depreciation method.A new asset is purchased for $30,000 that will produce an estimated 90,000 units over its useful life.Estimated residual value is $3,000.What is the depreciable cost per unit?

The Land account would include all of the following costs except

Which of the following is not an advantage of an operating lease?

Which of the following assets does not decline in service potential over the course of its useful life?

A truck costing $32,000 was destroyed when its engine caught fire.At the date of the fire, the accumulated depreciation on the truck was $16,000.An insurance cheque for $37,000 was received based on the replacement cost of the truck.The entry to record the insurance proceeds and the disposition of the truck will include a

Under IFRS, companies must account for their property, plant, and equipment using the revaluation model, where depreciable assets are re-valued upward to their fair values.

Can the accumulated depreciation of a depreciable asset be greater than an assets cost when it is fully depreciated and still in use?

A truck costing $15,000 and on which $14,000 of accumulated depreciation has been recorded was discarded as having no value.The entry to record this event would include a

If a trademark is developed internally, it cannot be recognized as an intangible asset on the statement of financial position.

The expected costs to retire an asset are called

All research costs should be capitalized when incurred.

The Accumulated Depreciation account represents a cash fund available to replace property, plant, and equipment.

The carrying amount of an asset with a residual value that has been in use for three years is:

Angus Corp.acquires land for $105,000 cash.Additional costs are as follows: Angus will record the cost of the land as