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Exam 9: Long-Term Assets: Fixed and Intangible

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Question 51

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When a property, plant, and equipment asset is sold for cash, any gain or loss on the asset sold should be recorded.

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Question 52

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Copy equipment was acquired at the beginning of the year at a cost of $72,000 that has an estimated residual value of $9,000 and an estimated useful life of 5 years. It is estimated that the machine will output an estimated 1,000,000 copies. This year, 315,000 copies were made. What is the units-of-output depreciation for the year?

A) $22,050
B) $18,900
C) $22,680
D) $19,845

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Question 53

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The cost of replacing an engine in a truck is an example of ordinary maintenance.

A machine with a cost of $75,000 has an estimated residual value of $5,000 and an estimated life of 4 years or 18,000 hours. What is the amount of depreciation for the second full year, using the double-declining-balance method?

Land acquired so it can be resold in the future is listed on the balance sheet as a(n)

Which of the following are criteria for determining whether to record an asset as a fixed asset?

The process of transferring the cost of metal ores and other minerals removed from the earth to an expense account is called

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

Accumulated Depreciation-Buildings

Prior to adjustment at the end of the year, the balance in Trucks is $300,900 and the balance in Accumulated Depreciation-Trucks is $88,200. Details of the subsidiary ledger are as follows: ​ ​ Required:

When exchanging equipment, if the trade-in allowance is greater than the book value a loss results.

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

Fill in the missing numbers using the formula for fixed asset turnover: $\begin{array} { | l | r | r | r | r | } \hline & \text { Company A } & \text { Company B } & \text { Company C } & \text { Company D } \\\hline \text { Sales } & \$ 5,000,000 & \$ 720,000 & \$ 900,000 & ? \\\hline \text { Beginning fixed assets } & \$ 450,000 & \$ 275,000 & ? & \$ 380,000 \\\hline \text { Ending fixed assets } & \$ 800,000 & ? & \$ 310,000 & \$ 420,000 \\\hline \text { Fixed asset turnover } & ? & 2.4 \text { times } & 3 \text { times } & 2.6 \text { times } \\\hline\end{array}$

The method used to calculate the depletion of a natural resource is the straight-line method.

A leased asset will appear on the balance sheet as a long-term asset.

Classify each of the following as: -Exterior and interior painting

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

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

When a company establishes an outstanding reputation and has a competitive advantage because of it, the company should record goodwill on its financial statements.

A machine costing $185,000 with a 5-year life and $20,000 residual value was purchased January 2. Compute depreciation for each of the five years, using the double-declining-balance method.