Question 1

The term applied to the amount of cost to transfer to expense resulting from a decline in the utility of intangible assets is

Accepted Answer

A)  amortization 
B)  depletion 
C)  depreciation 
D)  allocation 
A)  amortization 
B)  depletion 
C)  depreciation 
D)  allocation

Question 2

When a seller allows a buyer an amount for old equipment that is traded in for new equipment of similar use,this amount is known as boot.

Accepted Answer

A) True 
 B)False

Question 3

The depreciable cost of a building is the same as its acquisition cost.

Accepted Answer

A) True 
 B)False

Question 4

Expenditures that add to the utility of fixed assets for more than one accounting period are

Accepted Answer

A)  committed expenditures 
B)  revenue expenditures 
C)  utility expenditures 
D)  capital expenditures 
A)  committed expenditures 
B)  revenue expenditures 
C)  utility expenditures 
D)  capital expenditures

Question 5

The proper journal entry to purchase a computer costing $975 on account to be utilized within the business would be

Accepted Answer

A)  Office Supplies 975
Accounts Payable 975 
B)  Office Equipment 975
Accounts Payable 975 
C)  Office Supplies 975
Accounts Receivable 975 
D)  Office Equipment 975
Accounts Receivable 975 
A)  Office Supplies 975
Accounts Payable 975 
B)  Office Equipment 975
Accounts Payable 975 
C)  Office Supplies 975
Accounts Receivable 975 
D)  Office Equipment 975
Accounts Receivable 975

Question 6

On December 31,it was estimated that goodwill of $65,000 was impaired.On July 1,a patent with an estimated useful economic life of 10 years was acquired for $60,000.

Accepted Answer

(a) (b) @#IMG-DLM& Annual Patent Amortiz

Question 7

On December 31,Strike Company sold one of its batting cages for $55,000.The equipment had an initial cost of $310,000 and has accumulated depreciation of $260,000.Depreciation has been taken up to the end of the year.What is the amount of the gain or loss on this transaction?

Accepted Answer

A)  loss of $55,000 
B)  loss of $5,000 
C)  gain of $5,000 
D)  gain of $55,000 
A)  loss of $55,000 
B)  loss of $5,000 
C)  gain of $5,000 
D)  gain of $55,000

Question 8

Regardless of the depreciation method,the amount that will be depreciated during the life of the asset will be the same.

Accepted Answer

A) True 
 B)False

Question 9

Chasteen Company acquired mineral rights for $9,100,000.The mineral deposit is estimated at 65,000,000 tons.During the current year,18,375,000 tons were mined and sold.
​
Required:

Accepted Answer

The answer of Chasteen Company acquired mineral rights for $9,100,000.The...

Question 10

The amount of depreciation expense for a fixed asset costing $95,000,with an estimated residual value of $5,000 and a useful life of 5 years or 20,000 operating hours,is $21,375 by the units-of-output method during a period when the asset was used for 4,500 hours.

Accepted Answer

A) True 
 B)False

Question 11

Computer equipment was acquired at the beginning of the year at a cost of $65,000 that has an estimated residual value of $3,800 and an estimated useful life of 8 years.Determine the (a)depreciable cost,(b)straight-line rate,and (c)annual straight-line depreciation.

Accepted Answer

The answer of Computer equipment was acquired at the beginning...

Question 12

The double-declining-balance method is an accelerated depreciation method.

Accepted Answer

A) True 
 B)False

Question 13

If a fixed asset with a book value of $10,000 is traded for a similar fixed asset,a trade-in allowance of $15,000 is granted by the seller,and the transaction is deemed to have commercial substance,the buyer would report a gain on exchange of fixed assets of $5,000.

Accepted Answer

A) True 
 B)False

Question 14

On December 31,Strike Company sold one of its batting cages for $20,000.The equipment had an initial cost of $310,000 and had accumulated depreciation of $260,000.Depreciation has been recorded up to the end of the year.What is the amount of the gain or loss on this transaction?

Accepted Answer

A)  gain of $20,000 
B)  gain of $30,000 
C)  loss of $20,000 
D)  loss of $30,000 
A)  gain of $20,000 
B)  gain of $30,000 
C)  loss of $20,000 
D)  loss of $30,000

Question 15

On October 1,Sebastian Company acquired new equipment with a fair market value of $458,000.Sebastian received a trade-in allowance of $92,000 on the old equipment of a similar type and paid cash of $366,000.The following information about the old equipment is obtained from the account in the equipment ledger: Cost,$336,000; accumulated depreciation on December 31,the end of the preceding fiscal year,$220,000; annual depreciation,$20,000.Assuming the exchange has commercial substance,journalize the entries to record: (a)the current depreciation of the old equipment to the date of trade-in and (b)the exchange transaction on October 1.

Accepted Answer

The answer of On October 1,Sebastian Company acquired new equipment...

Question 16

The entry to record the disposal of fixed assets will include a credit to accumulated depreciation.

Accepted Answer

A) True 
 B)False

Question 17

The depreciation method that does not use residual value in calculating the first year's depreciation expense is

Accepted Answer

A)  straight-line 
B)  units-of-output 
C)  double-declining-balance 
D)  sum-of-the-digits 
A)  straight-line 
B)  units-of-output 
C)  double-declining-balance 
D)  sum-of-the-digits

Question 18

On December 31,Bowman Company estimated that goodwill of $80,000 was impaired.On June 1,a patent with an estimated useful economic life of 10 years was acquired for $252,000.
​
Required:
(a)Journalize the adjusting entry on December 31 for the impaired goodwill.
(b)Journalize the adjusting entry on December 31 for the amortization of the patent rights.

Accepted Answer

@#IMG-DLM& Amortized patent ri

Question 19

Accumulated Depreciation

Accepted Answer

A)  is used to show the amount of cost expiration of intangibles 
B)  is the same as Depreciation Expense 
C)  is a contra asset account 
D)  is used to show the amount of cost expiration of natural resources 
A)  is used to show the amount of cost expiration of intangibles 
B)  is the same as Depreciation Expense 
C)  is a contra asset account 
D)  is used to show the amount of cost expiration of natural resources

Question 20

Determine the depreciation,for the year of acquisition and for the following year of a fixed asset acquired on October 1 for $500,000,with an estimated life of 5 years,and residual value of $50,000,using (a)the double declining-balance method and (b)the straight-line method.Assume a fiscal year ending December 31.

Accepted Answer

The answer of Determine the depreciation,for the year of acquisition...

Exam 9: Long-Term Assets: Fixed and Intangible

The term applied to the amount of cost to transfer to expense resulting from a decline in the utility of intangible assets is

When a seller allows a buyer an amount for old equipment that is traded in for new equipment of similar use,this amount is known as boot.

The depreciable cost of a building is the same as its acquisition cost.

Expenditures that add to the utility of fixed assets for more than one accounting period are

The proper journal entry to purchase a computer costing $975 on account to be utilized within the business would be

On December 31,it was estimated that goodwill of $65,000 was impaired.On July 1,a patent with an estimated useful economic life of 10 years was acquired for $60,000.

On December 31,Strike Company sold one of its batting cages for $55,000.The equipment had an initial cost of $310,000 and has accumulated depreciation of $260,000.Depreciation has been taken up to the end of the year.What is the amount of the gain or loss on this transaction?

Regardless of the depreciation method,the amount that will be depreciated during the life of the asset will be the same.

Chasteen Company acquired mineral rights for $9,100,000.The mineral deposit is estimated at 65,000,000 tons.During the current year,18,375,000 tons were mined and sold. ​ Required:

The amount of depreciation expense for a fixed asset costing $95,000,with an estimated residual value of $5,000 and a useful life of 5 years or 20,000 operating hours,is $21,375 by the units-of-output method during a period when the asset was used for 4,500 hours.

Computer equipment was acquired at the beginning of the year at a cost of $65,000 that has an estimated residual value of $3,800 and an estimated useful life of 8 years.Determine the (a)depreciable cost,(b)straight-line rate,and (c)annual straight-line depreciation.

The double-declining-balance method is an accelerated depreciation method.

If a fixed asset with a book value of $10,000 is traded for a similar fixed asset,a trade-in allowance of $15,000 is granted by the seller,and the transaction is deemed to have commercial substance,the buyer would report a gain on exchange of fixed assets of $5,000.

On December 31,Strike Company sold one of its batting cages for $20,000.The equipment had an initial cost of $310,000 and had accumulated depreciation of $260,000.Depreciation has been recorded up to the end of the year.What is the amount of the gain or loss on this transaction?

The entry to record the disposal of fixed assets will include a credit to accumulated depreciation.

The depreciation method that does not use residual value in calculating the first year's depreciation expense is

Accumulated Depreciation

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

Chasteen Company acquired mineral rights for $9,100,000.The mineral deposit is estimated at 65,000,000 tons.During the current year,18,375,000 tons were mined and sold. Required: