Exam 9: Reporting and Analyzing Long-Lived Assets

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 loss on disposal of an asset is reported in the financial statements

Which of the following is not a consideration when calculating depreciation?

If the proceeds from the sale of equipment exceed its carrying amount, a gain on disposal is reported.

When an asset is sold, a gain is reported that is equal to the amount that the

Use the following information for questions On January 1, 2015, Sundry Corp.purchased equipment for $55,000.It was expected to last 8 years, after which it will be sold for $3,000.It is expected to be used for a total of 8,000 machine hours, and was used for 900 hours during the year ended December 31, 2015. -The depreciation expense for 2015 using the double diminishing-balance method will be

Depreciation is a process of

A truck costing $14,000 and on which $12,000 of accumulated depreciation has been recorded was disposed of for $3,000 cash.The entry to record this event would include a

Units-of-production is an appropriate depreciation method to use when

Pippen Clinic Ltd.purchases land for $287,500 cash.The title and legal fees totalled $1,200.The clinic has the land graded for $30,000.What amount does Pippen Clinic record as the cost for the land?

Depreciation expense and impairment losses are presented in the operating section of the income statement.

Use the following information for questions On January 1, 2015, Sundry Corp.purchased equipment for $55,000.It was expected to last 8 years, after which it will be sold for $3,000.It is expected to be used for a total of 8,000 machine hours, and was used for 900 hours during the year ended December 31, 2015. -The depreciation expense for 2015 using the straight-line method will be

Tran Inc.purchased equipment for $48,000, and estimated that the equipment will have a $4,000 residual value at the end of its 8-year useful life.Using the double diminishing-balance method, the depreciation expense for the third year would be

An asset that cannot be sold separately in the market place is

Identify the basic accounting issues for intangible assets and goodwill.

A company purchased factory equipment on May 1, 2015 for $30,000.It is estimated that the equipment will have a $4,200 residual value at the end of its 8-year useful life.Using straight-line depreciation, the depreciation expense for the years ended December 31, 2015 and 2016 is

Which of the following statements concerning research and development costs is not true?

If a building is sold at a gain, the gain on disposal should be reported in the non-operating section of the income statement.

When purchasing land, the costs for clearing, draining, filling, and grading should be charged to a Land Improvements account.

Canada Revenue Agency requires a company to use the same depreciation method on its income tax return that is used in preparing financial statements.