Exam 9: Reporting and Analyzing Long-Lived Assets

On October 1, 2012, Ming Wo Ltd. places a new asset into service. The cost of the asset is $9,000 with an estimated 5-year life and $1,500 residual value. Assuming that Ming Wo uses the double diminishing-balance method of depreciation, what is the carrying amount of the asset at December 31, 2012?

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

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

Land improvements are generally debited to the Land account.

Using the diminishing-balance method results in higher expense in the early years, and therefore lower profit.

A patent

A characteristic of property, plant, and equipment is that it is

On December 31, 2012, Cee Corp sells an asset that originally cost $300,000 for $75,000. The accumulated depreciation account has a balance of $200,000 after the current year's depreciation of $15,000 had been recorded. The company should recognize a loss on disposal of

All property, plant, and equipment must be depreciated for accounting purposes.

Use the following information for questions On January 1, 2011, 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 depreciation expense for calendar 2011?

Use the following information for questions During 2012, Richlieu Corporation reported: -To one decimal, Richlieu's return on assets is

Under an operating lease, both the leased asset and the related lease obligation are shown on the statement of financial position.

When an impairment loss is recorded, the offsetting credit is recorded in accumulated depreciation.

If an asset is fully depreciated and retired

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

Property, plant, and equipment are ordinarily presented on the statement of financial position

Which of the following statements concerning financial statement presentation is false?

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?

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

When purchasing a delivery truck, the cost of painting the company logo on the side should be debited to Delivery Truck account.