Exam 9: Reporting and Interpreting Long-Lived Tangible and Intangible Assets

Use the information above to answer the following question.If the company sells the machine at the end of 5 years and receives $11,500,the journal entry to record the sale will include which of the following?

The company has net sales revenue of $3.6 million during 2016.The company's records also included the following information: What is the company's fixed asset turnover ratio for 2016?

Under the cost principle,a company capitalizes:

Accumulated Depreciation is classified as an expense.

A company sells a piece of equipment half-way through the accounting period.The straight-line rate of depreciation on the equipment is $40,000 per year.Before preparing the entry to record the sale of the equipment,the company should first debit:

When the amount of annual depreciation is revised because of a change in the estimated useful life of an asset,prior years' financial statements should be restated.

Sierra Nevada Corp.reported Sales Revenue of $500,000,000 and Sales Discounts of $4,000,000 for the year.The beginning balance of Net Plant and Equipment was $23,000,000,and the ending balance was $27,000,000.What is the fixed asset turnover ratio?

Goodwill:

A declining fixed asset turnover ratio suggests that a:

The MegaHit Film Studio owns a production lot and related equipment.How would MegaHit Company categorize these assets?

The Doodad Company purchases a machine for $400,000.The machine has an estimated residual value of $20,000.The company expects the machine to produce two million units.The machine is used to make 400,000 units during the current period. -Use the information above to answer the following question.If the units-of-production method is used,the depreciation expense for this period is:

Assume that,prior to preparing adjusting entries at the end of the year,Caterpillar Corporation has a fixed asset turnover ratio of 3.4 based on average net fixed assets of $500,000,000.Which of the following year-end adjustments would cause Caterpillar's fixed asset turnover ratio to increase?

Which of the following does not lead to a revision of an estimate of a company's depreciation expense?

Martinez,Inc.acquired a patent on January 1,2016 for $40,000 cash.The patent was estimated to have a useful life of 10 years with no residual value.On December 31,2017,before any adjustments were recorded for the year,management determined that the remaining useful life was 6 years (with that new estimate being effective as of January 1,2017).On June 30,2018,the patent was sold for $25,000. Required: Part a.Prepare the journal entry to record the acquisition of the patent on January 1,2016. Part b.Prepare the journal entry to record the annual amortization for 2016. Part c.Compute the amount of amortization that would be recorded in 2017. Part d.Determine the gain (loss)on sale on June 30,2018. Part e.Prepare the journal entry to record the sale of the patent on June 30,2018.

Use the following information for the next questions 104 and 105. A corporation using the double-declining-balance method of depreciation purchased a new machine on January 1, 2016.The machine cost $200,000, had an estimated useful life of 8 years and $25,000 residual value at the end of its useful life. -A piece of equipment was acquired on January 1,2015,at a cost of $22,000,with an estimated residual value of $2,000 and an estimated useful life of four years.The company uses the double-declining-balance method.What is its book value at December 31,2016?

Tidy Limited purchased a new van on January 1, 2016.The van cost $20,000.It has an estimated life of five years and the estimated residual value is $5,000.Tidy uses the double-declining-balance method to compute depreciation. -Use the information above to answer the following question.What is the depreciation expense for 2016?

The net amount shown on a balance sheet for an intangible asset with an unlimited life should be:

The journal entry to record the amortization of an intangible asset includes a:

If a company produces the same number of units per period over an asset's useful life,each period's depreciation expense using the straight-line method will be the same as that recorded using the units-of-production method.

Which of the following depreciation methods is used by most corporations to calculate depreciation expense for their tax returns?