Exam 16: Recording and Evaluating Capital Resource Process Activities: Investing

A loss due to impairment is recorded when:

Why might the returns on assets of two firms in the same industry not be useful in comparing the firms?

The intangible asset representing the difference between the purchase price paid for a going concern and the fair market value of the purchased company's identifiable net assets is referred to as:

Affiliated Industries purchased a piece of equipment for $5,500,FOB shipping point.The company paid freight of $225 and installation costs of $485.During installation,the equipment was damaged requiring $195 in repair costs.The total cost assigned to the equipment should be:

To calculate depreciation,all of the following must be determined except:

Jackson Corporation has a forklift that it paid $40,000 for and that has a book value today of $14,000.Jackson is going to trade this forklift for a newer forklift with a market value of $55,000.Jackson Corporation is going to give its forklift and $25,000 cash to acquire the newer forklift.Make the entry to record the acquisition of the new forklift.

Revenue expenditures:

Architect's fees during construction of a building should be:

Cowboy Enterprises owns some equipment with an original cost of $59,000 and a book value of $19,000 that is exchanged for a $20,000 notes receivable and $5,000 cash.Which of the following is not part of the entry to record this transaction?

Klocke Corporation purchased a truck for its delivery service.The list price of the truck was $32,000 but Klocke paid $5,000 cash and signed a $24,000 five year installment note to buy the truck.Before the truck was put into service the company logo was printed on the doors at a cost of $300.Because the truck will be making many deliveries to off-road locations,Klocke installed special shock absorbers that cost $300,however,$50 of the cost was due damage repaired when one of shocks was installed incorrectly.Sales tax on the truck was $1,200 and property tax for the first year was $600.What is the cost of the new truck?

All of the following are based on estimates except:

Ivy,Incorporated,purchased all the common stock of Harrell Company for $2,000,000.Harrell's net assets had a book value of $1,200,000 and a fair market value of $1,500,000.What amount of goodwill should Ivy record as a result of this transaction?

Galloway Corporation sold equipment with an original cost of $120,000 for $55,000 cash and recorded a loss of $15,000.What was the balance in the accumulated depreciation account on the date of the sale?

Which of the following would be considered a revenue expenditure?

Ivanhoe Enterprises acquired a piece of equipment on January 3,2010.The total cost of the equipment was $35,000.Ivanhoe estimated that the equipment would be used for 8 years before being sold for an estimated $7,000.Assuming the use of straight-line depreciation,the total depreciation expense for the year ended December 31,2010 was:

Kenyon Company purchased land and a building for $270,000.The appraised values of the land and building were $100,000 and $200,000,respectively.The purchase price allocated to the building should be:

On January 1,2010,Boyd Corporation purchased a piece of equipment for $50,000,will pay $1,500 in property tax during the year,paid $500 to have it delivered,paid $1,000 to have it installed,paid $300 for 1 year of insurance,and paid $1,800 in sales tax.If the equipment has a ten year life and a $2,000 salvage value what will be the depreciation of the equipment for 2010 if straight-line depreciation is used.

When an exchange is deemed to have no economic substance,the gain is not recognized and is subtracted from which of the following to determine the cost of the new asset.

B&V Enterprises exchanged a used crane with an original cost of $200,000 and accumulated depreciation of $140,000 for a truck with a fair market value of $100,000.B&V also paid cash of $25,000.What amount of gain should B&V report on this transaction?