Exam 9: Reporting and Analyzing Long-Lived Assets

A company purchased factory equipment on May 1, 2012 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 calendar 2012 is

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

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

On July 1, 2012, 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 2013?

With regard to depreciation and income taxes, which of the following statements is not true?

An intangible asset must be identifiable.

Normally, businesses only dispose of property, plant, and equipment by either sale or exchange.

An intangible asset should

Use the following information for questions During 2012, Richlieu Corporation reported: -To one decimal, Richlieu's asset turnover ratio is

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

Goodwill can be recorded

Vickers Ltd. uses the units-of-production depreciation method. A new asset is purchased for $27,000 that will produce an estimated 125,000 units over its useful life. Estimated residual value is $2,000. What is the depreciable cost per unit?

Management should select the depreciation method that

Which of the following is not an acceptable method of depreciation for financial statement purposes in Canada?

For calendar 2012, a pharmaceutical company has $2,500,000 in research costs. Before accounting for these costs, the profit of the company is $2,200,000. Ignoring taxes, what is the amount of profit or loss after these research costs are accounted for?

Action Advertising Corp has the following assets: The total amount reported under Property, Plant, and Equipment would be

Mercy General Hospital installs a new parking lot. The paving cost $25,000 and the lights to illuminate the new parking lot cost $13,000. Which of the following statements is true with respect to these expenditures?

The calculation of depreciation using the diminishing-balance method

Beynon Corp purchased office equipment for $20,000, with an estimated residual value of $4,000 at the end of its 8-year useful life. Assuming the double diminishing-balance method is used, the constant percentage to be applied against the carrying amount each year is

Which of the following would not be included in the Equipment account?