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

T.Powers Company's financial statements on December 31,2015,showed the following: Net Sales $275,000 Fixed Assets,January 1 $ 73,000 Fixed Assets,December 31 $ 67,000 Total Assets,January 1 $ 97,000 Total Assets,December 31 $100,000 What is the fixed asset turnover for 2015 (rounded to two decimal places)?

Transport Inc.has a fleet of 10 large trucks that cost a total of $1,410,000.The fleet is expected to be driven a total of 1,000,000 miles during its estimated 10-year life and be sold for $141,000 at the end of its useful life.If the fleet was driven 125,000 miles during the current year,what is the amount of depreciation that would be calculated using the straight-line and units-of-production methods,respectively?

The allocation method used for natural resources is similar to which of the following depreciation methods?

A company paid $500,000 to purchase equipment and $15,000 to have the equipment delivered to and installed in the company's production facilities.The equipment is expected to be used a total of 28,000 hours throughout its estimated useful life of six years.The estimated residual value of the equipment is $5,000.The company began using the equipment on May 1,2016.The company has an October 31,2016 year-end.It used the equipment for a total of 11,200 hours between May 1 and October 31,2016.Using the units-of- production method,what amount of depreciation expense would the company report in the income statement prepared for the year-ended October 31,2016?

On January 1,2016,Xit Company bought a new delivery truck for $30,000.Xit plans to use the truck for 4 years,during which it will be driven 50,000 miles.The truck will be worthless at the end of the 4 years.If the truck was driven 15,000 miles in 2016,Depreciation Expense using units-of-production is:

The Gulp convenience store chain buys new soda machines for $450,000 and pays $50,000 for installation costs.One-half of the total cost or $250,000 is paid in cash; a note in the amount of $250,000 is signed.How should the company record this transaction?

Matching part of the cost of a long-lived asset with the revenues generated by the asset is:

Some analysts compare companies by focusing on earnings before interest,taxes,depreciation,and amortization (EBITDA),rather than net income.

Squid Roe,Inc.'s $48,000 sushi bar was originally expected to be used for eight years with no residual value.Depreciation on the bar was $6,000 per year for the past two years.In the third year,management changed the estimated life of the bar to be a total of only six years instead of eight.What should Squid Roe do?

Which of the following statements is correct?

On September 1,a company purchased a vehicle for $23,000 with a residual value of $3,000.The estimated useful life is 5 years and the company uses the straight-line method.What is the depreciation expense for the year ended December 31?

Which account is credited in a journal entry to record depreciation on machinery?

The fixed asset turnover is the:

Which of the following statements is correct?

There are no significant differences between GAAP and IFRS with regards to the accounting for tangible and intangible assets.

A loss on disposal of an asset would be reported:

Natural resources are first recorded as ______,then recorded as ______ when extracted,and lastly recorded as ______ when sold.

Goodwill

Which of the following is a long-lived asset?

EBITDA is equal to which of the following?