Exam 10: Long-Term Assets: Fixed and Intangible

If a fixed asset, such as a computer, were purchased on January 1 for $3,750 with an estimated life of three years and a salvage or residual value of $150, the journal entry for monthly expense under straight-line depreciation is a. Depreciation Expense $\quad 100$ $\quad$ Accumulated Depreciation $\quad 100$ b. Depreciation Expense $\quad 1,200$ $\quad$ Accumulated Depreciation $\quad 1,200$ c. Accumulated Depreciation $\quad 1,200$ $\quad$ Depreciation Expense $\quad 1,200$ d. Accumulated Depreciation 100 $\quad$ Depreciation Expense $\quad$$\quad$ 100

Classify each of the following costs associated with long-lived assets as one of the following: -Sales taxes paid on new factory equipment

Factors contributing to a decline in the usefulness of a fixed asset may be divided into which of the following two categories?

Journalize each of the following transactions: (a)A wing costing $2,345,000 was added to the building. A new mortgage was issued for the cost. (b)Equipment was upgraded to increase its capacity to produce widgets. The upgrade cost of $11,500 was paid in cash. (c)A major overhaul costing $8,000 on a machine increased the useful life by four years. The payment was made in cash.

A fixed asset with a cost of $41,000 and accumulated depreciation of $36,000 is traded for a similar asset priced at $50,000 (fair market value) in a transaction with commercial substance. Assuming a trade-in allowance of $4,000, at what cost will the new equipment be recorded in the books?

On June 1, Michael Company purchased equipment at a cost of $120,000 that has a depreciable cost of $90,000 and an estimated useful life of three years or 30,000 hours.​Using straight-line depreciation, calculate depreciation expense for the second year.

Copy equipment was acquired at the beginning of the year at a cost of $72,000 that has an estimated residual value of $9,000 and an estimated useful life of five years. It is estimated that the machine will output an estimated 1,000,000 copies. This year, 315,000 copies were made. Determine the (a) depreciable cost, (b) depreciation rate, and (c) units-of-activity depreciation for the year.

A fixed asset's estimated value at the time it is to be retired from service is called

The ratio measuring the number of dollars of sales earned per dollar of fixed assets is the

Computer equipment was acquired at the beginning of the year at a cost of $63,000 that has an estimated residual value of $3,000 and an estimated useful life of five years. Determine the (a) depreciable cost (b) double-declining-balance rate, and (c) double-declining-balance depreciation for the first year.

Equipment acquired on January 2, Year 1, at a cost of $525,000 has an estimated useful life of eight years and an estimated residual value of $45,000. Required (a)What is the annual amount of depreciation for the first three years, assuming the straight-line method of depreciation is used? (b)What is the book value of the equipment on January 1, Year 4? (c)Assuming that the equipment is sold on January 2, Year 4, for $326,000, journalize the entry to record the sale. (d)Assuming that the equipment is sold on January 2, Year 4, for $394,000, journalize the entry to record the sale.

Standby equipment held for use in the event of a breakdown of regular equipment is reported as property, plant, and equipment on the balance sheet.

Which intangible assets are amortized over their useful life?

Regardless of the depreciation method, the amount that will be depreciated during the life of the asset will be the same.

Which of the following are criteria for determining whether to record an asset as a fixed asset?

Golden Sales has bought $135,000 in fixed assets on January 1 associated with sales equipment. The residual value of these assets is estimated at $10,000 at the end of their four-year service life. Golden Sales managers want to evaluate the options of depreciation.​ (a) Compute the annual straight-line depreciation and provide the sample depreciation journal entry to be postedat the end of each of the years. (b) Write the journal entries for each year of the service life for these assets using the double-declining-balancemethod.

Classify each of the following as: -Exterior and interior painting

Classify each of the following costs associated with long-lived assets as one of the following: -Landscaping at new business location

On July 1, Harding Construction purchases a bulldozer for $228,000. The equipment has an eight-year life with a residual value of $16,000. Harding uses straight-line depreciation. (a) Calculate the depreciation expense and provide the journal entry for the first year ending December 31. (b) Calculate the third year's depreciation expense and provide the journal entry for the third year endingDecember 31. (c) Calculate the last year's depreciation expense and provide the journal entry for the last year.

Though a piece of equipment is still being used, the equipment should be removed from the accounts if it has been fully depreciated.