Exam 9: Accounting for Long-Lived and Intangible Assets

On January 1, 2019, Mandarin Company purchased a new truck for $29,400. Its estimated useful life is seven years or 200,000 miles. The truck's expected salvage value is $1,400. During 2019, the truck was driven 20,000 miles. Assuming units-of-production depreciation, 2019 depreciation expense is:

On April 30, 2019, Peter & Sons sold some used equipment for $112,000. The accumulated depreciation on the equipment when sold was $128,000. Peter & Sons properly recorded a $44,000 gain on the sale. The original cost of the equipment when it was purchased several years ago by Peter & Sons must have been:

On July 1, 2019, Wyoming Systems Company purchased for $81,000 a new machine that has an estimated useful life of six years (or 300,000 cutting operations), after which the expected salvage value is $5,400. Under each of the following depreciation methods, calculate the depreciation expense for 2020. Required: a. Straight-line depreciation b. Double declining-balance depreciation c. Units-of-production depreciation, if 55,000 cutting operations were made in 2020

Holmes Packaging sold a machine for $49,500. The company bought this machine for $120,000 seven years ago and was depreciating it on a straight-line basis over ten years to a $12,000 salvage value. What is the gain (loss) that Holmes Packaging should report?

A truck that cost Owle Company $108,000, was estimated to have a salvage value of $24,000, and was expected to last 10 years. At the end of 5 years of use (assume straight line depreciation), it was sold for $90,000, the journal entry to record the sale will involve a:

Saul Company purchased a tractor at a cost of $120,000. The tractor has an estimated salvage value of $20,000 and an estimated life of 8 years, or 12,000 hours of operation. The tractor was purchased on January 1, 2019 and was used 2,400 hours in 2019 and 2,100 hours in 2020. What method of depreciation will produce the maximum depreciation expense in 2020?

Seligman, Inc. has a computer that originally cost $46,200. Depreciation has been recorded for five years using the straight-line method, with a $4,200 estimated salvage value at the end of an expected seven-year life. After recording depreciation at the end of the fifth year, Seligman disposes of the computer. For each of the following independent disposals of the computer, place the dollar amount of the recognized gain or loss in the appropriate column. If there is no recognized gain or loss, place a zero in each column.

On January 1, 2019, Wild Blue Company purchased for $400,000 a new machine that has an estimated useful life of four years (or 660,000 cutting operations), after which the expected salvage value is $40,000. Under each of the following depreciation methods, calculate the depreciation expense for 2019. Required: a. Straight-line depreciation b. Double-declining balance depreciation c. Units-of-production depreciation, if 99,000 cutting operations were made in 2019

On January 1, 2018, Frontier Corporation purchased for $474,000, equipment having a useful life of ten years and an estimated salvage value of $24,000. Adventure has recorded depreciation of the equipment on the straight-line method. On December 31, 2025, the equipment was sold for $84,000. As a result of this sale, Frontier should recognize:

Equipment was purchased for $72,000 on October 1, 2019. Its estimated useful life is four years with a $4,200 expected salvage value. Using double-declining balance depreciation, the 2020 depreciation expense is:

At January 1, 2019, Kane Company had total assets of $2,100,000 and at December 31, 2019, its total assets were $2,400,000. Kane's net sales for 2019 were $3,000,000 and its 2021 net income was $210,000. DuPage's return on assets for 2019 is:

Golden Dollar Company purchased a machine on January 1, 2019 for $360,000, with a 5-year life, and a $36,000 residual life. If the company uses the double-declining balance method of depreciation, compute the depreciation expense for the year ended December 31, 2023.

On April 30, 2019, Macy Products purchased machinery for $132,000. The useful life of this machinery is estimated at 5 years, with a $32,000 residual value. The company uses the double-declining-balance method. Depreciation expense for the fiscal year ending on December 31, 2020 will be:

Nutgum Company made a package purchase of three pieces of machinery for $48,000. The fair market values of the machinery were determined to be as follows: What cost should Nutgum record for Machine C?

Jafari Corporation purchased a truck at the beginning of 2019 for $180,000. The truck is estimated to have a salvage value of $6,000 and a useful life of 240,000 miles. It was driven 36,000 miles in 2019 and 64,000 miles in 2020. What is the book value of the truck on December 31, 2020?

On January 1, 2017, Flute, Inc. purchased a machine for $148,800. Flute uses straight-line depreciation and estimates an eight-year useful life and a $4,800 salvage value. On December 31, 2024, Flute cannot locate a buyer for the used machine so it is scrapped. In recording the machine retirement, Flute should reflect:

On January 1, 2017, Starch, Inc. purchased a machine for $120,000. Starch uses straight-line depreciation and estimates a seven-year useful life and a $4,500 salvage value. On December 31, 2023, Starch cannot locate a buyer for the used machine so it is scrapped. In recording the machine retirement, Starch should reflect:

Following is a numbered list of assets and the definitions of six assets. Place the number of the appropriate asset in the space to the left of its definition. -The exclusive and continuing right to use certain terms, names, or symbols, usually to identify a brand or family of products.

Vermont Industries, a clothing mail-order retailer, purchased a new industrial sewing machine for $156,000. This machine is expected to operate for 5 years after which it will be sold for salvage value estimated to be $9,000. What is the yearly depreciation expense under the straight-line method?

Rabbit Company purchased equipment with a cost of $570,000, with an estimated residual value of $30,000, and an estimated life of 15 years. After 5 full years of recording depreciation by the straight-line method, it was determined that due to obsolescence, the equipment's useful life should be reduced by 5 years and the residual value changed to zero. The depreciation expense for year 6 is: