Exam 9: Long-Term Assets: Fixed and Intangible

Equipment was acquired at the beginning of the year at a cost of $75,000. The equipment was depreciated using the straight-line method based upon an estimated useful life of 6 years and an estimated residual value of $7,500. (a) What was the depreciation expense for the first year? (b) Assuming the equipment was sold at the end of the second year for $\$ 59,000$ , determine the gain or loss on sale of the equipment. (c) Journalize the entry to record the sale.

The ratio measuring the number of dollars of sales earned per dollar of fixed assets is the

Computer equipment (office equipment) purchased 6 1/2 years ago for $170,000, with an estimated life of 8 years and a residual value of $10,000, is now sold for $60,000 cash. (Appropriate entries for depreciation had been made for the first six years of use.) Journalize the following entries: (a) Record the depreciation for the one-half year pri or to the sale, using the straght-line method. (b) Record the sale of the equipment. (c) Assuming that the equipment had been sold for $\$ 25,000$ cash, prepare the entry to record the sale.

Which of the following is included in the cost of land?

On June 1, Michael Company purchased equipment at a cost of $120,000 that has a depreciable cost of $90,000 and an estimated useful life of 3 years or 30,000 hours. Using straight-line depreciation, calculate depreciation expense for the second year.

The process of transferring the cost of an asset to an expense account is called all of the following except

Mathai Company has sales of $4,800,000 for the current year. The book value of its fixed assets at the beginning of the year was $1,450,000 and at the end of the year was $1,600,000. The fixed asset turnover ratio for Mathai is