Question 1

The effect of recording depreciation for the year is a(n):

Accepted Answer

A)  decrease in assets and a decrease in net income. 
B)  decrease in assets but no change in owners' equity. 
C)  increase in assets and an increase in net income. 
D)  decrease in net income and no change to assets. 
A)  decrease in assets and a decrease in net income. 
B)  decrease in assets but no change in owners' equity. 
C)  increase in assets and an increase in net income. 
D)  decrease in net income and no change to assets.

Question 2

Apache, Inc. purchased equipment at the beginning of 2011 for $91,000. In addition, Apache paid $5,000 for delivery of the equipment to its plant and $5,000 for installation of the equipment. The equipment has an estimated salvage value of $9,000 and an estimated life of 8 years or 100,000 hours of operation. Apache is looking at alternative depreciation methods for the equipment. Determine the following:

Accepted Answer

The answer of Apache, Inc. purchased equipment at the beginning...

Question 3

Cash flows from acquiring and disposing of long-term assets are classified as:

Accepted Answer

A)  operating activities. 
B)  investing activities. 
C)  financing activities. 
D)  purchasing activities. 
A)  operating activities. 
B)  investing activities. 
C)  financing activities. 
D)  purchasing activities.

Question 4

Aggie, Inc. 
Aggie, Inc. purchased a truck at a cost of $12,000. The truck has an estimated salvage value of $2,000 and an estimated life of 5 years, or 100,000 hours of operation. The truck was purchased on January 1, 2011, and was used 27,000 hours in 2011 and 26,000 hours in 2012.
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Refer to Aggie, Inc.'s information presented above, if Aggie uses the double-declining-balance depreciation method, what amount is the depreciation expense for 2012?

Accepted Answer

A)  $4,800 
B)  $2,880 
C)  $1,728 
D)  $2,000 
A)  $4,800 
B)  $2,880 
C)  $1,728 
D)  $2,000

Question 5

Fisher Apartments purchased an apartment building to rent to university students on December 15, 2011. The tenants moved in on January 1, 2012. On Super Bowl Sunday, a student punched a hole in the wall when his favorite team fumbled the ball. It cost the landlord $400 to repair the hole. How should this cost be recorded?

Accepted Answer

A)  It should be recorded as part of the asset account. 
B)  It should be recorded as repair and maintenance expense. 
C)  It should not be recorded as the tenants will be charged for the damage. 
D)  It should not be recorded since this is an immaterial amount to the landlord. 
A)  It should be recorded as part of the asset account. 
B)  It should be recorded as repair and maintenance expense. 
C)  It should not be recorded as the tenants will be charged for the damage. 
D)  It should not be recorded since this is an immaterial amount to the landlord.

Question 6

Cash paid to purchase significant amounts of fixed assets would be reported in the statement of cash flows in:

Accepted Answer

A)  the cash flows from operating activities section. 
B)  the cash flows from financing activities section. 
C)  the cash flows from investing activities section. 
D)  a separate schedule. 
A)  the cash flows from operating activities section. 
B)  the cash flows from financing activities section. 
C)  the cash flows from investing activities section. 
D)  a separate schedule.

Question 7

Assets classified as property, plant, and equipment are reported at:

Accepted Answer

A)  each asset's estimated market value less depreciation on the balance sheet date. 
B)  each asset's estimated market value on the balance sheet date. 
C)  the estimated salvage value on the balance sheet date. 
D)  each asset's original cost less depreciation since acquisition. 
A)  each asset's estimated market value less depreciation on the balance sheet date. 
B)  each asset's estimated market value on the balance sheet date. 
C)  the estimated salvage value on the balance sheet date. 
D)  each asset's original cost less depreciation since acquisition.

Question 8

Lopez Corporation purchased equipment with a cost of $400,000 at the beginning of 2011. The equipment has an estimated life of 8 years or 100,000 units of product. The estimated salvage value is $50,000. During 2011, 12,000 units of product were produced with this machinery. Determine the following:

Accepted Answer

The answer of Lopez Corporation purchased equipment with a cost...

Question 9

Equipment with a cost of $160,000, an estimated salvage 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 salvage value changed to zero. The depreciation expense for the current and future years is:

Accepted Answer

A)  $11,636. 
B)  $16,000. 
C)  $11,000. 
D)  $8,000. 
A)  $11,636. 
B)  $16,000. 
C)  $11,000. 
D)  $8,000.

Question 10

Max's Tire Center Company 
Selected data from the financial statements of Max's Tire Center are provided below.
 
-Refer to the selected data provided for Max's Tire Center. Which of the following would result from a vertical analysis of Max's balance sheet in 2012?

Accepted Answer

A)  Fixed assets increased $12,000 or 7.14% during 2012. 
B)  Total assets is $500,000 in 2012. 
C)  Fixed assets is 27.6% of total assets in 2012. 
D)  Fixed assets is 30% of total assets in 2012. 
A)  Fixed assets increased $12,000 or 7.14% during 2012. 
B)  Total assets is $500,000 in 2012. 
C)  Fixed assets is 27.6% of total assets in 2012. 
D)  Fixed assets is 30% of total assets in 2012.

The effect of recording depreciation for the year is a(n):

Cash flows from acquiring and disposing of long-term assets are classified as:

Cash paid to purchase significant amounts of fixed assets would be reported in the statement of cash flows in:

Assets classified as property, plant, and equipment are reported at:

Lopez Corporation purchased equipment with a cost of $400,000 at the beginning of 2011. The equipment has an estimated life of 8 years or 100,000 units of product. The estimated salvage value is $50,000. During 2011, 12,000 units of product were produced with this machinery. Determine the following:

Max's Tire Center Company Selected data from the financial statements of Max's Tire Center are provided below. -Refer to the selected data provided for Max's Tire Center. Which of the following would result from a vertical analysis of Max's balance sheet in 2012?

Financial Accounting

Corporate Financial Statements

Recording Accounting Transactions

Accrual Accounting and Adjusting Entries

Internal Control and Cash

Receivables

Inventory

Liabilities

Stockholders Equity

Statement of Cash Flows

Financial Statement Analysis

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Exam 8: Fixed Assets and Intangible Assets

The effect of recording depreciation for the year is a(n):

Cash flows from acquiring and disposing of long-term assets are classified as:

Cash paid to purchase significant amounts of fixed assets would be reported in the statement of cash flows in:

Assets classified as property, plant, and equipment are reported at:

Max's Tire Center Company Selected data from the financial statements of Max's Tire Center are provided below. -Refer to the selected data provided for Max's Tire Center. Which of the following would result from a vertical analysis of Max's balance sheet in 2012?

Financial Accounting

Corporate Financial Statements

Recording Accounting Transactions

Accrual Accounting and Adjusting Entries

Internal Control and Cash

Receivables

Inventory

Liabilities

Stockholders Equity

Statement of Cash Flows

Financial Statement Analysis

Filters