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

On January 1,Charlie Co.purchased a truck for $50,000 which has an estimated productive life of 100,000 miles.Its residual value is $5,000.During the first full year of its useful life,the company drove the truck 25,000 miles.Its depreciation expense for the year using the units of production method is:

All costs to get an asset in place and ready for use should be:

An asset is purchased on January 1 for $40,000.It is expected to have a useful life of five years after which it will have an expected residual value of $5,000.The company uses the straight-line method.If it is sold for $30,000 exactly two years after it is purchased,the company will record a:

A company sells a long-lived asset that originally cost $200,000 for $50,000 on December 31,2016.The Accumulated Depreciation account had a balance of $110,000 after the current year's depreciation of $45,000 had been recorded.The company should recognize a:

If a company wants exclusive rights to a special name,image or slogan,it should obtain a:

Your company buys a computer system for $3 million and pays the vendor $200,000 to install the computer system.Your company should record:

The book value of a long-lived tangible asset is equal to:

The carrying value of a long-lived asset is referred to as its:

The MegaHit Film Studio has a licensing right (or agreement)to distribute films produced by the Artsy Film Company.How would the MegaHit Company classify this licensing right?

Which of the following is not the same as book value?

Chuck Daniels Auto acquired a hydraulic lift on August 1,2016.The lift cost $165,000,had an estimated useful life of 10 years and a residual value of $16,500 at the end of its useful life.What amount of depreciation expense would be recognized under the double-declining-balance method for the year ending December 31,2016?

Under what circumstances should a company record an asset impairment loss?

A company should depreciate a long-lived tangible asset to:

The Three Little Pigs built three houses for a total cost of $160,000.Appraisal values for the three completed houses were: straw house,$40,000,wood house $60,000,and brick house $100,000.Using the basket purchase allocation,the recorded value of the brick house should be:

A company purchases property that includes land,buildings and equipment for $5.5 million.The company pays $180,000 in legal fees,$220,000 in commissions,and $100,000 in appraisal fees.The land is estimated at 25%,the buildings are at 40%,and the equipment at 35% of the property value. Required: Part a.Determine the total acquisition cost of this "basket purchase." Part b.Allocate the total acquisition cost to the individual assets acquired. Part c.Prepare the journal entry to record the purchase assuming that the company paid 50% of the amounts using cash and signed a note (due in five years)for the remainder.

On January 1,2017,Ace Electronics bought a new cash register for $2,500.Ace plans to use the cash register for 4 years and then sell it for $200.If Ace uses straight-line depreciation,depreciation expense for the year ended December 31,2017 equals:

At December 31,2017 and 2016,respectively,Tyler Industries reported land,buildings,and equipment totaling $5,655,000 and $2,152,000 along with Accumulated Depreciation of $1,000,000 and $600,000 on its balance sheets.Revenues amounted to $38,227,000 and $12,113,000 for 2017 and 2016,respectively. Required: Part a.Compute Tyler's fixed asset turnover ratio for the year ended December 31,2017. Part b.Assume that Tyler's fixed asset turnover ratio increased from 2016 to 2017.How might an analyst interpret an increasing ratio? Part c.Alternatively,assume that Tyler's fixed asset turnover rate decreased.Does a declining ratio always indicate a negative trend?

If a company capitalizes costs that should be expensed,how is its income statement for the current period impacted?

An asset's useful life is based on the:

A company has long-lived tangible assets with a cost of $3.5 million; its Accumulated Depreciation account has a balance of $1.1 million.Which of the following statements is correct?