Exam 9: Long-Term Assets: Fixed and Intangible

Once the useful life of a depreciable asset has been estimated and the amount to be depreciated each year has been determined,the amounts cannot be changed.

(True/False)

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Question 41

Eagle Country Club has acquired a lot to construct a clubhouse.Eagle had the following costs related to the construction: Determine the cost of the club house to be reported on the balance sheet.

(Essay)

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Question 42

Identify each of the following expenditures as chargeable to (a)Land,(b)Land Improvements,(c)Buildings,(d)Machinery and Equipment,or (e)other account.

(Essay)

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Question 43

Both the initial cost of the asset and the accumulated depreciation will be taken off the books with the disposal of the asset.

(True/False)

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Question 44

If a fixed asset,such as a computer,were purchased on January 1 for $3,750 with an estimated life of 3 years and a salvage or residual value of $150,the journal entry for monthly expense under straight-line depreciation is

(Multiple Choice)

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Question 45

On December 31,Strike Company has decided to discard one of its batting cages.The equipment had an initial cost of $310,000 and has accumulated depreciation of $260,000.Depreciation has been recorded up to the end of the year.Which of the following will be included in the entry to record the disposal?

(Multiple Choice)

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Question 46

Expected useful life is

(Multiple Choice)

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Question 47

The difference between the balance in a fixed asset account and its related accumulated depreciation account is the asset's book value.

(True/False)

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Question 48

Williams Company acquired machinery on July 1,Year 1,at a cost of $130,000.The estimated useful life of the machinery was 10 years and the estimated residual value was $10,000.Williams uses the double-declining-balance method of depreciation.On October 1,Year 4,Williams sold the equipment for $75,000. (a)Record the journal entry for the depreciation on this machinery for Year 4. (b)Record the journal entry for the sale of the machinery.

(Essay)

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Question 49

Capital expenditures are costs that improve a fixed asset or extend its useful life.

(True/False)

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Question 50

The cost of computer equipment does not include the consultant's fee to supervise installation of the equipment.

(True/False)

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Question 51

Functional depreciation occurs when a fixed asset is no longer able to provide services at the level for which it was intended.

(True/False)

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Question 52

When land is purchased to construct a new building,the cost of removing any structures on the land should be charged to the building account.

(True/False)

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Question 53

The acquisition costs of property,plant,and equipment should include all normal,reasonable and necessary costs to get the asset in place and ready for use.

(True/False)

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Question 54

Machinery was purchased on January 1 for $51,000.The machinery has an estimated life of 7 years and an estimated salvage value of $9,000.Double-declining-balance depreciation for the second year would be (round calculations to the nearest dollar):

(Multiple Choice)

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Question 55

Which intangible assets are amortized over their useful life?

(Multiple Choice)

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Question 56

The cost of a patent with a remaining legal life of 10 years and an estimated useful life of 7 years is amortized over 10 years.

(True/False)

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Question 57

Residual value is not incorporated in the initial calculations for double-declining-balance depreciation.

(True/False)

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Question 58

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.

(Multiple Choice)

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Question 59

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

(Multiple Choice)

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Question 60

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Exam 9: Long-Term Assets: Fixed and Intangible

Once the useful life of a depreciable asset has been estimated and the amount to be depreciated each year has been determined,the amounts cannot be changed.

Eagle Country Club has acquired a lot to construct a clubhouse.Eagle had the following costs related to the construction: ​ Determine the cost of the club house to be reported on the balance sheet.

Identify each of the following expenditures as chargeable to (a)Land,(b)Land Improvements,(c)Buildings,(d)Machinery and Equipment,or (e)other account.

Both the initial cost of the asset and the accumulated depreciation will be taken off the books with the disposal of the asset.

If a fixed asset,such as a computer,were purchased on January 1 for $3,750 with an estimated life of 3 years and a salvage or residual value of $150,the journal entry for monthly expense under straight-line depreciation is

Expected useful life is

The difference between the balance in a fixed asset account and its related accumulated depreciation account is the asset's book value.

Capital expenditures are costs that improve a fixed asset or extend its useful life.

The cost of computer equipment does not include the consultant's fee to supervise installation of the equipment.

Functional depreciation occurs when a fixed asset is no longer able to provide services at the level for which it was intended.

When land is purchased to construct a new building,the cost of removing any structures on the land should be charged to the building account.

The acquisition costs of property,plant,and equipment should include all normal,reasonable and necessary costs to get the asset in place and ready for use.

Machinery was purchased on January 1 for $51,000.The machinery has an estimated life of 7 years and an estimated salvage value of $9,000.Double-declining-balance depreciation for the second year would be (round calculations to the nearest dollar):

Which intangible assets are amortized over their useful life?

The cost of a patent with a remaining legal life of 10 years and an estimated useful life of 7 years is amortized over 10 years.

Residual value is not incorporated in the initial calculations for double-declining-balance depreciation.

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

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Internal Control and Cash

Receivables

Liabilities: Current,installment Notes,and Contingencies

Liabilities: Bonds Payable

Corporations: Organization, stock Transactions, and Dividends

Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Cost Systems

Activity-Based Costing

Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Evaluating Variances From Standard Costs

Evaluating Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

Lean Manufacturing and Activity Analysis

Filters

Eagle Country Club has acquired a lot to construct a clubhouse.Eagle had the following costs related to the construction: Determine the cost of the club house to be reported on the balance sheet.

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