Exam 10: Noncurrent Assets

Bully Ltd acquires all the business assets and liabilities of Small Ltd for $700,000 cash. The best estimates of the fair market values of the assets and liabilities are: \ Receivables 180000 Payables 90000 Inventories 120000 Property 210000 Equipment 80000 What is the value of goodwill acquired by Bully Ltd?

Use the information below to answer the following questions: On 1 January 2010, a new motor vehicle with a useful life of 4 years and an estimated trade-in value of $12 000 was purchased by a business for $54 000. The straight-line method is employed and the financial year ends on 31 December. -What was the accumulated depreciation at 31 December 2012?

Accumulated depreciation is a(n):

Which of the following statements about the capitalisation of goodwill is true?

Use the information below to answer the following questions. Norman Ltd purchased a motor vehicle for $45,000 on 1 July 2009. The vehicle was expected to have a 4-year life and a $13,000 trade-in value, and was expected to be driven for 160,000 km. The financial period ends on 30 June. -Assuming Norman Ltd used the straight-line method of depreciation,the accumulated depreciation at 30 June 2011 was:

Use the information below to answer the following questions. Alby Ltd purchased a machine for $32,000 on 1 January 2010. The machine was expected to have a useful life of 4 years. The financial year ends on 31 December. The straight-line method of depreciation is employed. -A machine purchased on 1 July 2010 cost $100 000 and has a zero estimated salvage value.The useful life of the machine is 5 years.If the machine was sold on 30 September 2012,what would its net book value be?

Use the information below to answer the following questions. Speedy Ltd purchased a delivery truck on 1 July 2010 for $450 000. It had an estimated salvage value of $150 000. The estimated number of kilometers to be driven was 150 000. The truck was depreciated using the units-of-production method. Speedy Ltd’s financial period ends on 31 December. The truck was driven the following distances: during 6 months to 31 December 2010, 25 000 km; during 12 months to 31 December 2011, 75 000 km; and during 12 months to 31 December 2012, 40 000 km. -What was the balance of accumulated depreciation at 31 December 2011?

A truck that cost $250 000 and had accumulated depreciation of $180 000 was sold for $50 000 cash in June 2012.This transaction will:

Use the information below to answer the following questions: Tanner Ltd purchased an item of equipment on the first day of the financial period, 1 July 2010, for $200 000. The equipment was depreciated using the reducing balance method and a rate of 40%. It was sold on 1 July 2012. -If the machine was sold for $65 000,what was the gain or loss on disposal?

Use the information below to answer the following questions: Jacques Ltd purchased a computer for $4500 on 1 July 2009. It had an estimated useful life of 3 years. It was depreciated using the straight-line method. The financial year ends on 30 June. -What was the balance of accumulated depreciation at 30 June 2012?

Use the information below to answer the following questions: Equipment with a cost of $160 000 has an estimated residual value of $10 000 and an estimated useful life of 4 years. -Which of the following is NOT depreciated under GAAP?

When a company sells machinery at a price equal to its book value,this transaction will be recorded with an entry that would include which of the following?

What was the net book value of the machine at 31 December 2010?

The purpose of depreciation is to:

Use the information below to answer the following questions. Brown Ltd purchased a machine on the first day of the financial period, 1 July 2010, for $100,000. The machine was depreciated using the reducing balance method and a rate of 20%. It was sold on 1 July 2011. -If the machine was sold for $70 000 on 1 July 2012,what was the gain or loss on disposal?

A used machine with a purchase price of $75 000,requiring an overhaul costing $8000,installation costs of $4000 and testing costs of $2000,would have a cost basis of:

Use the information below to answer the following questions. Norman Ltd purchased a motor vehicle for $45,000 on 1 July 2009. The vehicle was expected to have a 4-year life and a $13,000 trade-in value, and was expected to be driven for 160,000 km. The financial period ends on 30 June. -Assuming Norman Ltd used the reducing balance method of depreciation and a rate of 40%,the balance of the accumulated depreciation account at 30 June 2011 was:

B Ltd purchased a machine for $96 000 on 1 July 2011.The machine was expected to have a useful life of 4 years.The financial year ends on 30 June.The straight-line method of depreciation is employed.What was the depreciation expense for year ended 30 June 2012?

If equipment that cost $100 000 and has accumulated depreciation of $70 000,is sold for $20 000,the journal entry to record the sale would include:

Use the information below to answer the following questions. Alby Ltd purchased a machine for $32,000 on 1 January 2010. The machine was expected to have a useful life of 4 years. The financial year ends on 31 December. The straight-line method of depreciation is employed. -A machine purchased on 1 July 2010 cost $100 000 and has a zero estimated salvage value.The useful life of the machine is 5 years.What is the balance of accumulated depreciation at 30 June 2012?