Exam 9: Long-Lived Tangible and Intangible Assets

A company bought a piece of equipment for $40,000 and expects to use it for eight years.The company then plans to sell it for $3,500.The company has already recorded depreciation of $35,995.Using the double-declining-balance method,what is the company's annual depreciation expense for the upcoming year?

Morten Co. ,which uses the double-declining-balance method of depreciation,purchased a new machine on January 1,2018.The machine cost $160,000,had an estimated useful life of 8 years and $20,000 residual value at the end of its useful life. What is the balance of the Accumulated Depreciation account at the end of 2019?

A company purchased office equipment for $24,500 and paid $1,470 in sales tax,$550 for installation,$3,200 for a needed adjustment to the equipment,and $2,600 for supplies that will be used for periodic routine maintenance.How should the company record this transaction?

A machine is purchased on January 1,2018,for $90,000.It is expected to have a useful life of five years and a residual value of $5,000.The company closes its books on December 31.Under the double-declining balance method,what is the total amount of depreciation to be expensed during the 2019?

On January 1,2018,Trueblood,Inc.purchased a piece of machinery for use in operations.The total acquisition cost was $33,000.The machine has an estimated useful life of three years and a residual value of $3,000.Assume that units produced by the machine will total 16,000 during 2018,23,000 during 2019,and 21,000 during 2020. Required: Part a.Use this information to complete the following table. Part b.On January 1,2019,the machine was rebuilt at a cost of $7,000.After it was rebuilt,the total estimated life of the machine was increased to five years (from the original estimate of three years)and the residual value to $6,000 (from $3,000).Assume that the company chose the straight-line method for depreciation.Compute the annual depreciation expense after the change in estimates. Use the information provided in Part b.to answer Part c,d,and e. Part c.Prepare the adjusting entry to record the depreciation expense for the year ended December 31,2019. Part d.On December 31,2020,the machine was sold for $7,500.Compute the book value on that date. Part e.Prepare the journal entry to record the sale.

Which of the following is a long-lived asset?

Which of the following statements regarding goodwill is not correct?

Match each asset with the appropriate category. -Supplies

Company A uses an accelerated depreciation method while Company B uses the straight-line method.All other things being equal,during the first few years of the asset's use,Company A will show which of the following compared to Company B?

Match each asset with the appropriate category. -Patents

Which of the following is not a characteristic of tangible long-lived assets?

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?

On January 11,2018,Orangewood Industries bought a new cash register for $7,500.In calculating depreciation expense for the year ended December 31,2018,Orangewood's accountant will assume that the cash register was purchased on:

Which of the following statements most appropriately describes the purpose of depreciating a long-lived tangible asset?

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

Greer Manufacturing purchases property that includes land,buildings and equipment for $8,250,000.The company pays $270,000 in legal fees,$330,000 in commissions,and $150,000 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.

Match each term with the appropriate explanation.Not all explanations will be used. -Capitalization of cost

Universal Corp.sold a used piece of machinery for $11,000 that it had purchased for $15,000.At the time of the sale,accumulated depreciation relating to the machinery was $6,000.As a result of this sale:

On December 31,2018,Far Niente Winery sold a wine press for $545,000;the wine press had originally cost $900,000.Cash was paid by the buyer of the press.Accumulated Depreciation on the press,updated to the date of disposal,was $450,000. What is the journal entry to record the disposal of the asset?

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