Exam 8: Reporting and Analyzing Long-Lived Assets

Equipment costing $105,000 with a salvage value of $21,000 and an estimated life of 8 years has been depreciated using the straight-line method for 2 years. Assuming a revised estimated total life of 6 years and no change in the salvage value, the depreciation expense for Year 3 would be

Cost allocation of an intangible asset is referred to as

The Modified Accelerated Cost Recovery System (MACRS) is a depreciation method that

On October 1, 2017, Mann Company places a new asset into service. The cost of the asset is $120,000 with an estimated 5-year life and $30,000 salvage value at the end of its useful life. What is the depreciation expense for 2017 if Mann Company uses the straight-line method of depreciation?

Runge Company purchased machinery on January 1 at a list price of $300,000, with credit terms 2/10, n/30. Payment was made within the discount period. Runge paid $15,000 sales tax on the machinery, and paid installation charges of $5,300. Prior to installation, Runge paid $12,000 to pour a concrete slab on which to place the machinery. What is the total cost of the new machinery?

On January 1, a machine with a useful life of five years and a residual value of $80,000 was purchased for $240,000. What is the depreciation expense for year 2 under the double-declining-balance method of depreciation?

The depreciation method that applies a constant percentage to depreciable cost in calculating depreciation is

The asset turnover is calculated as net sales divided by ending total assets.

Equipment with a cost of $300,000 has an estimated salvage value of $20,000 and an estimated life of 4 years or 10,000 hours. It is to be depreciated by the straight-line method. What is the amount of depreciation for the first full year, during which the equipment was used 2,700 hours?

Accountants do not attempt to measure the change in a plant asset's market value during ownership because

Mitchell Corporation bought equipment on January 1, 2017. The equipment cost $300,000 and had an expected salvage value of $50,000. The life of the equipment was estimated to be 6 years. The book value of the equipment at the beginning of the third year would be

Equipment with a cost of $640,000 has an estimated salvage value of $40,000 and an estimated life of 4 years or 15,000 hours. It is to be depreciated using the units-of-activity method. What is the amount of depreciation for the first full year, during which the equipment was used 3,300 hours?

Intangible assets

Ron's Quik Shop bought equipment for $140,000 on January 1, 2016. Ron estimated the useful life to be 5 years with no salvage value, and the straight-line method of depreciation will be used. On January 1, 2017, Ron decides that the business will use the equipment for a total of 6 years. What is the revised depreciation expense for 2017?

Which of the following methods of computing depreciation is production based?

Danford Trucking purchased a tractor trailer for $147,000. Danford uses the units-of-activity method for depreciating its trucks and expects to drive the truck 1,000,000 miles over its 12-year useful life. Salvage value is estimated to be $21,000. If the truck is driven 80,000 miles in its first year, how much depreciation expense should Danford record?

Goodwill

The following information is provided for Nguyen Company and Northwest Corporation. (in \ millions) Nguven Company Northwest Corporation Net income 2017 \ 165 \ 420 Net sales 2017 1,650 4,900 Total assets 12/31/15 1,000 2,400 Total assets 12/31/16 1,050 3,000 Total assets 12/31/17 1,150 4,000 What is Nguyen's asset turnover for 2017?

Trademarks are generally shown on the balance sheet under

Which of the following statements concerning IFRS and U.S. GAAP is correct?