Exam 12: Long-Term Operating Assets: Acquisition, cost Allocation, and Derecognition

Net book value is equal to the original cost of an asset minus accumulated depreciation for that asset.

Briefly describe the accounting for the acquisition and use of equipment and indicate which accounts are involved in accounting for equipment and what types of accounts are these?

For intangible assets,U.S.GAAP requires significant disclosures for ________.

Which,if any,intangible assets are subject to amortization?

Woowee Company manufactures electric motorcycles.On April 1,it purchased a machine for its assembly line at a contract price of $300,000 with terms of 2/10,n/30.Woowee paid the contract price on April 8 and also incurred installation and transportation costs of $5,000,sales tax of $18,000,and testing costs of $4,000.During testing,the machine was accidentally damaged,so the company had to pay $2,000 to repair it. Required: (a)What characteristics are necessary for a company to include an asset in the category of property,plant,and equipment? (b)What is the capitalizable cost of the machine?

Under current accounting practice,what are the two general classes of intangible assets?

The amount of capitalizable interest for a constructed asset is the lesser of actual interest incurred and avoidable interest.

On March 1,Orono Co.began construction of a small building.The following expenditures were incurred for construction: The building was completed and occupied on July 1.To help pay for construction $50,000 was borrowed on March 1 on a 12%,three-year note payable.The only other debt outstanding during the year was a $500,000,10% note issued two years ago. Required: (a)Calculate the weighted-average accumulated expenditures. (b)Calculate avoidable interest.

A company recognizes a loss on the income statement whenever it sells a fixed asset for less than its original cost.

Generally,which of the following costs are capitalized for self-constructed assets?

Lunar Products purchased a computer for $13,000 on July 1,2016.The company intends to depreciate it over 4 years using the double-declining balance method.Residual value is $1,000.What is depreciation for 2017?

a.What is the distinction between a capital and an operating expenditure? Give two examples of each. b.Distinguish between ordinary repairs and maintenance and major repairs.How should a company account for each?

A firm does not recognize internally generated intangible assets because their value cannot be measured reliably.

When computing the amount of interest cost to be capitalized,the concept of "avoidable interest" refers to ________.

The cost of individually acquired intangible assets is charged as an expense of the period in which the costs are incurred.

The loss on abandonment of an asset is equal to its carrying value on the date of abandonment plus disposal costs.

Emerson Enterprises is constructing a building.Construction began in 2016 and the building was completed December 31,2016.Emerson made payments to the construction company of $600,000 on July 1,$1.800,000 on September 1,and $2,400,000 on December 31.What is the amount of weighted-average accumulated expenditures that provides the basis for determining capitalizable interest?

What is goodwill and how is it accounted for?

Identify and briefly describe the four factors involved in determining the dollar amount of a firm's periodic charge to depreciation?

Property,plant,and equipment include both tangible and intangible fixed assets.