Exam 9: Long-Lived Tangible and Intangible Assets

During 2013,a company paid $1,200,000 to acquire a roller coaster.The estimated useful life of the roller coaster was estimated at ten years and its residual value was expected to be $200,000.As of December 31,2018,Accumulated Depreciation in the amount of $500,000 had been recorded on the roller coaster.Management estimates that other amusement parks and scrap dealers would currently pay $600,000 for the roller coaster. Required: Part a.Determine the asset impairment loss,if any,on the roller coaster at December 31,2018. Part b.Prepare the journal entry to record the asset impairment loss on this roller coaster as of December 31,2018.

Which of the following terms does not mean the same as the others?

On January 1,2017,Whittle,Inc.purchased timber rights for $1,500,000,which are expected to produce a total of 2,000,000 cords of wood over 4 years.The cords of wood cut were 200,000 in 2017 and 280,000 in 2018.Depletion for 2017 equals:

Which of the following statements about depreciation is correct? A company:

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

Holly,Inc.has a building that originally cost $562,500.Holly expects to be able to sell the facility for $160,500 at the end of its useful life.The balance of the related Accumulated Depreciation account is $387,000.The depreciable cost of the facility is:

Reno Recycling made the following expenditures in connection with the construction of its new building: Required: Prepare a schedule showing the amounts to be recorded as land,buildings,and machinery.

Why does the IRS allow larger depreciation amounts in the early years of an asset's life?

When a company records depletion on natural resources,it will have which of the following effects?

Match each term with the appropriate explanation.Not all explanations will be used. -Long-lived assets

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.

The primary difference between ordinary repairs and extraordinary repairs is:

Which of the following statements is correct when the straight-line method is used to compute depreciation?

Match each term with the appropriate definition.Not all definitions will be used. -Accelerated depreciation

Ms.Gardenia,the company bookkeeper,recorded the annual repair costs on the company's machinery as an increase to the Machinery account.As a result,which of the following statements correctly describes this situation?

A declining fixed asset turnover ratio can be caused by acquiring additional assets in the current period in anticipation of increased revenue in the future.

A company paid $17,000 for a vehicle that had an estimated useful life of 4 years,total capacity of 100,000 miles,and a residual value of $1,000.After 2 full years of using the vehicle (20,000 miles in Year 1 and 27,000 miles in Year 2),the company sold the vehicle for $6,000 and reported a loss on disposal of $3,480. Required: Determine the method of depreciation that was used by the company.(Show your work using all three methods. )

Hacienda Realty,a real estate management company,buys land that contains an abandoned apartment building for $9,000,000.It pays a construction company $1,000,000 to demolish the apartment building.Which of the following is correct?

Which of the following would be properly classified as a long-lived asset?

A loss on disposal of an asset would be reported: