Exam 9: Reporting and Analyzing Long-Lived Assets

On April 1, 2015, a machine was purchased for $33,600.It was estimated that it would have a $3,200 residual value at the end of its 5-year useful life.It was also estimated that the machine would be used for a total of 80,000 hours over the 5 years.If the actual number of machine hours used in 2015 was 12,000 hours and the company uses the units-of-production method of depreciation, the depreciation expense for 2015 would be

Recording depreciation on equipment affects both the statement of financial position and the income statement.

Carrying amount is used in determining the amount that the diminishing-balance rate is applied to.

If an asset is fully depreciated and retired for proceeds equal to its residual value

Equipment was purchased on January 1 for $39,000 with an estimated residual value of $3,000.The current year's Depreciation Expense is $4,000, calculated on the straight-line basis, and the balance of the Accumulated Depreciation account at the end of the year is $12,000.The remaining useful life of the equipment is

Assuming there are no impairment losses, the balance in the Accumulated Depreciation account represents the

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.

A machine that cost $72,000 has an estimated residual value of $6,000 and an estimated useful life of 5 years or 30,000 hours.Using the units-of-production method, the depreciation expense for the second year, during which the machine was used 5,000 hours, would be

The difference between a depreciable asset's cost and its residual value is called

The cost of a finite intangible asset is not amortized, but the asset is tested periodically for impairment.

Cordelia Corp.acquires land for $120,000 cash.Additional costs are as follows: Cordelia will record the cost of the land as

The asset turnover indicates how efficiently a company uses its assets.

On January 1, 2015, a machine with a useful life of five years and a residual value of $2,500 was purchased for $25,000.Using the double diminishing-balance method, the depreciation expense for the year ending December 31, 2016 would be

Use the following information for questions On January 1, 2014, 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 2015?

A change in the estimated residual value of property, plant, and equipment requires a restatement of prior years' depreciation.

An intangible asset should

If disposal of an asset occurs during the year, depreciation is

On July 1, 2015, a machine with a useful life of five years and a residual value of $4,000 was purchased for $20,000.Under straight-line depreciation, what is the depreciation expense for calendar 2016?

In calculating depreciation, residual value is

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