Exam 9: Long-Lived Tangible and Intangible Assets

A piece of equipment was acquired on January 1,2018,at a cost of $22,000,with an estimated residual value of $2,000 and an estimated useful life of four years.The company uses the double-declining-balance method.What is its book value at December 31,2019?

Amortization is an adjusting entry that records the amount of:

Match each asset with the appropriate category. -Licensing rights

Wilshire Company purchased land for $120,000.The cost to demolish the existing building and prepare the land for a new building was $16,000.The real estate commission paid to buy the land was $7,200.What amount should be recorded in Wilshire's accounting records for the cost of the land?

The following information is available from the accounting records of the Bright Company: What is the fixed asset turnover ratio?

Match each term with the appropriate definition.Not all definitions will be used. -Fixed assets

At December 31,2018 and 2017,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 2018 and 2017,respectively. Required: Part a.Compute Tyler's fixed asset turnover ratio for the year ended December 31,2018. Part b.Assume that Tyler's fixed asset turnover ratio increased from 2017 to 2018.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 truck's engine is overhauled for $8,000,the journal entry would normally include a debit to:

Which of the following statements about capitalizing costs is correct?

Which of the following costs associated with long-lived assets are expensed (rather than capitalized)?

Extraordinary repairs:

Complete the table below by placing "X's" in the correct columns to identify the: (1)type of asset and (2)appropriate method of allocating the existing costs that were already recorded.

Companies with the same asset may report different amounts of depreciation in a given year for all of the following reasons,except:

When a company sells equipment for cash on a date other than the last day of the accounting period,it must:

An asset's residual value is:

Company A uses an accelerated depreciation method while Company B uses the straight-line method for an asset of the same cost and useful life.Which of the following statements is correct?

Superior,Inc.just bought a new machine to be used on its production line.Which of these costs should not be capitalized?

Which of the following statements about straight-line depreciation is correct?

The machine was originally purchased on January 1,2017 for $40,000.The machine was estimated to have a useful life of 5 years and no residual value.The company uses straight-line depreciation.On December 31,2018,the machine was sold for $25,000. Required: Part a.Determine the gain (loss)on disposal,if any. Part b.Prepare the journal entry to record the sale. Part c.Assuming that the company had used the double-declining balance method instead of the straight-line method,explain how this would this have affected the gain (or loss)on the sale.(Do not include any calculations. )

Intangible assets with limited lives are usually amortized using the straight-line method with no residual value.