Exam 9: Reporting and Analyzing Long-Lived Assets

A computer company has $4,000,000 in research and development costs.Before accounting for these costs, the net income of the company is $4,800,000.What is the amount of net income or loss before taxes after these research and development costs are accounted for?

An asset was purchased for $400,000.It had an estimated salvage value of $80,000 and an estimated useful life of 10 years.After 5 years of use, the estimated salvage value is revised to $64,000 but the estimated useful life is unchanged.Assuming straight-line depreciation, depreciation expense in Year 6 would be

On October 1, 2022, Manning Company places a new asset into service.The cost of the asset is $120,000 with an estimated 5-year life and $30,000 salvage value at the end of its useful life.What is the depreciation expense for 2022 if Manning Company uses the straight-line method of depreciation?

The book value of a plant asset is the difference between the

The Modified Accelerated Cost Recovery System (MACRS) is a depreciation method that

Companies only dispose of plant assets by either sale or exchange.

Burke Company purchases land for $180,000 cash.Burke assumes $5,000 in property taxes due on the land.The title and attorney fees totaled $2,000.Burke has the land graded for $4,400.They paid $20,000 for paving of a parking lot.What amount does Burke record as the cost for the land?

In recording the acquisition cost of an entire business,

Cost allocation of an intangible asset is referred to as

The declining-balance method of depreciation produces a(n)

Goodwill is recorded only when there is an exchange transaction that involves the purchase of an entire business.

Which of the following would not be charged to the Equipment account?

A machine was purchased for $54,000 and it was estimated to have a $9,000 salvage value at the end of its useful life.Monthly depreciation expense of $600 was recorded using the straight-line method.The annual depreciation rate is

One characteristic of a plant asset is that it is

An expenditure for which of the following items would be considered a revenue expenditure?

Nix Corporation sold equipment for $40,000.The equipment had an original cost of $120,000 and accumulated depreciation of $60,000.Ignoring the tax effect, as a result of the sale

When a change in estimate is made, there is no correction of previously recorded depreciation expense.

The cost of successfully defending a patent in an infringement suit should be

Copyrights are granted by the federal government

Units-of-activity is an appropriate depreciation method to use when