Exam 9: Long-Lived Tangible and Intangible Assets

When S.Dee Company bought B.Darin Company,the purchase price included a patent valued at $15,000.The patent has 10 years remaining of its legal life,but its estimated useful life to S.Dee Company was only 8 years.The journal entry to record the annual patent amortization would include a:

Peppertree Co.'s financial statements on December 31,2018,showed the following: What is the fixed asset turnover for 2018 (rounded to two decimal places)?

Why should a company divide up the cost of a "basket purchase" among the different assets purchased?

When assets are purchased as a group,the total cost must be divided up and allocated to each asset in proportion to the market value of the assets as a whole.

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

Chuck Daniels Auto acquired a hydraulic lift on August 1,2018.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 31,2018?

Duluth Ranch,Inc.purchased a machine on January 1,2018.The cost of the machine was $34,000.Its estimated residual value was $10,000 at the end of an estimated 5-year life.The company expects to produce a total of 20,000 units.The company produced 2,500 units in 2018 and 3,200 units in 2019. Required: Part a.Calculate depreciation expense for 2018 and 2019 using the straight-line method. Part b.Calculate the depreciation expense for 2018 and 2019 using the units-of-production method. Part c.Calculate depreciation expense for 2018 through 2022 using the double-declining balance method.

Assuming no additions,replacements,or extraordinary repairs,the book value of a long-lived asset declines over time.

Match each term with the appropriate explanation.Not all explanations will be used. -Asset impairment loss

Your company pays $620,000 for a patent that has 10 years remaining.Each year,your company should:

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

Your company buys a computer server that it expects to use for eight years and then sell when it upgrades to a more powerful model.The server would probably be used by the business that buys it at that time for another three years.The useful life of the server for your company is:

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 residual value of the facility is:

Companies within the same industry do not always use the same depreciation method,but will use the same expected useful life for the same piece of equipment.

Xit Company bought a new delivery truck.The manufacturer says that the truck should last for ten years or 120,000 miles.Xit plans to use the truck for 4 years,during which it will be driven 50,000 miles.What is the useful life of the truck for straight-line depreciation purposes?

When originally purchased,a vehicle had an estimated useful life of 8 years.The vehicle cost $25,000 and its estimated residual value is $3,000.After 3 years of straight-line depreciation,the asset's total estimated useful life was revised from 8 years to 5 years and there was no change in the estimated residual value.The Depreciation Expense in year 4 is:

The straight-line depreciation method and the double-declining-balance depreciation method:

Your company has net sales revenue of $36 million during the year.At the beginning of the year,fixed assets are $8 million.At the end of the year,fixed assets are $10 million.What is the fixed asset turnover ratio?

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 B will show which of the following compared to Company A?

Depreciable cost equals an asset's cost: