Exam 10: Long-Term Assets: Fixed and Intangible

The process of transferring the cost of an asset to an expense account is called all of the following except

Match each account name to the financial statement section (a-i) in which it would appear. -Amortization Expense

A gain can be realized when a fixed asset is discarded.

Classify each of the following costs associated with long-lived assets as one of the following: -Supplies (materials) used to test new equipment

Machinery is purchased on July 1 of the current fiscal year for $240,000. It is expected to have a useful life of four years, or 25,000 operating hours, and a residual value of $15,000. Compute the depreciation for the last six months of the current fiscal year ending December 31 by each of the following methods: (a)Straight-line (b)Double-declining-balance (c)Units-of-activity (used for 1,600 hours during the current year)​

Financial statement data for the years ended December 31 for Parker Corporation are as follows:​​ (a) Determine the fixed asset turnover for the current and prior years. (b) Does the change in fixed asset turnover from the prior year to the current year indicate a favorable or unfavorable trend?

Computer equipment was acquired at the beginning of the year at a cost of $57,000 that has an estimated residual value of $9,000 and an estimated useful life of five years. Determine the second-year depreciation using the straight-line method.

On April 15, Compton Co. paid $2,800 to upgrade a delivery truck and $125 for an oil change. Journalize the entries for the upgrade to the delivery truck and oil change expenditures.

The cost of repairing damage to a machine during installation is debited to a fixed asset account.

When the amount of use of a fixed asset varies from year to year, the method of determining depreciation expense that best matches allocation of cost with revenue is

All of the following are needed for the calculation of straight-line depreciation except

Identify the following as a fixed asset (FA), or intangible asset (IA), natural resource (NR), or none of these (N).? (a) Computer (b) Patent (c) Oil reserve (d) Goodwill (e) U.S. Treasury note (f) Land used for employee parking (g) Gold mine

Falcon Company acquired an adjacent lot to construct a new warehouse, paying $40,000 and giving a short-term note for $410,000. Legal fees paid were $13,275, delinquent taxes assessed were $14,500, and fees paid to remove an old building from the land were $15,800. Materials salvaged from the demolition of the building were sold for $6,800. A contractor was paid $890,000 to construct the new warehouse. Determine the cost of the land to be reported on the balance sheet and show your work.

Xtra Company purchased a business from Argus for $96,000 above the fair value of its net assets. Argus had developed the goodwill over 12 years. How much would Xtra amortize the goodwill for its first year?

Computer equipment (office equipment) purchased 6½ years ago for $170,000, with an estimated life of eight years and a residual value of $10,000, is now sold for $60,000 cash. (Appropriate entries for depreciation had been made for the first six years of use.) Journalize the following entries: (a)Record the depreciation for the one-half year prior to the sale, using the straight-line method. (b)Record the sale of the equipment. (c)Assuming that the equipment had been sold for $25,000 cash, prepare the entry to record the sale.

Solare Company acquired mineral rights for $60,000,000. The diamond deposit is estimated at 6,000,000 tons. During the current year, 2,300,000 tons were mined and sold. (a)Determine the depletion rate. (b)Determine the amount of depletion expense for the current year. (c)Journalize the adjusting entry to recognize the depletion expense.

The term applied to the amount of cost to transfer to expense resulting from a decline in the utility of intangible assets is

Classify each of the following costs associated with long-lived assets as one of the following: -Cost assessed by city for paving a public street that borders land on which a new business location will be constructed

The formula for depreciable cost is

Classify each of the following as: -Installing a new air conditioning system in an old building