Question 1

The calculation for annual depreciation using the units-of-output method is

Accepted Answer

A)  (Initial cost / Estimated output)× Actual yearly output 
B)  (Depreciable cost / Yearly output)× Estimated output 
C)  Depreciable cost / Yearly output 
D)  (Depreciable cost / Estimated output)× Actual yearly output 
A)  (Initial cost / Estimated output)× Actual yearly output 
B)  (Depreciable cost / Yearly output)× Estimated output 
C)  Depreciable cost / Yearly output 
D)  (Depreciable cost / Estimated output)× Actual yearly output

Question 2

On December 31,Strike Company sold one of its batting cages for $50,000.The equipment had an original cost of $310,000 and has 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 $50,000 
B)  loss of $50,000 
C)  no gain or loss 
D)  cannot be determined 
A)  gain of $50,000 
B)  loss of $50,000 
C)  no gain or loss 
D)  cannot be determined

Question 3

Prior to adjustment at the end of the year,the balance in Trucks is $300,900 and the balance in Accumulated Depreciation-Trucks is $88,200.Details of the subsidiary ledger are as follows:
​
​
   Required:

Accepted Answer

The answer of Prior to adjustment at the end of...

Question 4

A new machine with a purchase price of $109,000,with transportation costs of $12,000,installation costs of $5,000,and special acquisition fees of $6,000,would have a cost basis of

Accepted Answer

A)  $114,000 
B)  $126,000 
C)  $121,000 
D)  $132,000 
A)  $114,000 
B)  $126,000 
C)  $121,000 
D)  $132,000

Question 5

The name,term,or symbol used to identify a business and its products is called

Accepted Answer

A)  goodwill 
B)  a patent 
C)  a trademark 
D)  a copyright 
A)  goodwill 
B)  a patent 
C)  a trademark 
D)  a copyright

Question 6

A copy machine acquired on May 1 with a cost of $2,545 has an estimated useful life of 3 years.Assuming that it will have a residual value of $445,determine the depreciation for the first and second year by the straight-line method.Round your answers to the nearest whole dollar.

Accepted Answer

Straight-line depreciation = (cost - est

Question 7

Computer equipment was acquired at the beginning of the year at a cost of $57,000 that has an estimated residual value of $9,000 and an estimated useful life of 5 years.Determine the second-year depreciation using the straight-line method.

Accepted Answer

A)  $13,200 
B)  $19,200 
C)  $9,600 
D)  $9,000 
A)  $13,200 
B)  $19,200 
C)  $9,600 
D)  $9,000

Question 8

The process of transferring the cost of metal ores and other minerals removed from the earth to an expense account is called

Accepted Answer

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

Question 9

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:

Accepted Answer

The answer of Computer equipment (office equipment)purchased 6 1 /...

Question 10

Factors contributing to a decline in the usefulness of a fixed asset may be divided into the following two categories

Accepted Answer

A)  salvage and functional 
B)  physical and functional 
C)  residual and salvage 
D)  functional and residual 
A)  salvage and functional 
B)  physical and functional 
C)  residual and salvage 
D)  functional and residual

Question 11

Champion Company purchased and installed carpet in its new general offices on March 31 for a total cost of $18,000.The carpet is estimated to have a 15-year useful life and no residual value.
​

Accepted Answer

The answer of Champion Company purchased and installed carpet in...

Question 12

A building with an appraisal value of $154,000 is made available at an offer price of $172,000.The purchaser acquires the property for $40,000 in cash,a 90-day note payable for $45,000,and a mortgage amounting to $75,000.The cost basis recorded in the buyer's accounting records to recognize this purchase is

Accepted Answer

A)  $154,000 
B)  $172,000 
C)  $160,000 
D)  $120,000 
A)  $154,000 
B)  $172,000 
C)  $160,000 
D)  $120,000

Question 13

It is not necessary for a company to use the same depreciation method for financial statements and for determining income taxes.

Accepted Answer

A) True 
 B)False

Question 14

XYZ Co.incurred the following costs related to the office building used in operating its sports supply company:
​
   Classify each of the costs as a capital expenditure or a revenue expenditure.

Accepted Answer

(a)Revenue expenditure (b)Capi

Question 15

A used machine with a purchase price of $77,000,requiring an overhaul costing $8,000,installation costs of $5,000,and special acquisition fees of $3,000,would have a cost basis of

Accepted Answer

A)  $93,000 
B)  $90,000 
C)  $82,000 
D)  $85,000 
A)  $93,000 
B)  $90,000 
C)  $82,000 
D)  $85,000

Question 16

​Newport Company has sales of $2,025,000 for the current year.The book value of its fixed assets at the beginning of the year was $550,000 and at the end of the year was $800,000.The fixed asset turnover ratio for Newport is

Accepted Answer

A)  ​3.0 
B)  ​3.6 
C)  ​3.7 
D)  ​2.5 
A)  ​3.0 
B)  ​3.6 
C)  ​3.7 
D)  ​2.5

Question 17

Which of the following statements is true?

Accepted Answer

A)  ​A larger fixed asset turnover ratio is associated with firms that are more labor intensive and require smaller fixed asset investments. 
B)  ​The fixed asset ratio cannot be compared across time for an individual company. 
C)  ​​A smaller fixed asset turnover ratio is associated with firms that are more labor intensive and require smaller fixed asset investments. 
D)  ​The fixed asset ratio is not useful for comparing different companies. 
A)  ​A larger fixed asset turnover ratio is associated with firms that are more labor intensive and require smaller fixed asset investments. 
B)  ​The fixed asset ratio cannot be compared across time for an individual company. 
C)  ​​A smaller fixed asset turnover ratio is associated with firms that are more labor intensive and require smaller fixed asset investments. 
D)  ​The fixed asset ratio is not useful for comparing different companies.

Question 18

An estimate of the amount for which an asset can be sold at the end of its useful life is called residual value.

Accepted Answer

A) True 
 B)False

Question 19

Machinery is purchased on July 1 of the current fiscal year for $240,000.It is expected to have a useful life of 4 years,or 25,000 operating hours,and a residual value of $15,000.Compute the depreciation for the last six months of the current fiscal year ending December 31 by each of the following methods:
​

Accepted Answer

The answer of Machinery is purchased on July 1 of...

Question 20

The calculation for annual depreciation using the straight-line depreciation method is

Accepted Answer

A)  Initial cost / Estimated useful life 
B)  Depreciable cost / Estimated useful life 
C)  Depreciable cost × Estimated useful life 
D)  Initial cost × Estimated useful life 
A)  Initial cost / Estimated useful life 
B)  Depreciable cost / Estimated useful life 
C)  Depreciable cost × Estimated useful life 
D)  Initial cost × Estimated useful life

Exam 9: Long-Term Assets: Fixed and Intangible

The calculation for annual depreciation using the units-of-output method is

On December 31,Strike Company sold one of its batting cages for $50,000.The equipment had an original cost of $310,000 and has 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?

Prior to adjustment at the end of the year,the balance in Trucks is $300,900 and the balance in Accumulated Depreciation-Trucks is $88,200.Details of the subsidiary ledger are as follows: ​ ​ Required:

A new machine with a purchase price of $109,000,with transportation costs of $12,000,installation costs of $5,000,and special acquisition fees of $6,000,would have a cost basis of

The name,term,or symbol used to identify a business and its products is called

A copy machine acquired on May 1 with a cost of $2,545 has an estimated useful life of 3 years.Assuming that it will have a residual value of $445,determine the depreciation for the first and second year by the straight-line method.Round your answers to the nearest whole dollar.

Computer equipment was acquired at the beginning of the year at a cost of $57,000 that has an estimated residual value of $9,000 and an estimated useful life of 5 years.Determine the second-year depreciation using the straight-line method.

The process of transferring the cost of metal ores and other minerals removed from the earth to an expense account is called

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:

Factors contributing to a decline in the usefulness of a fixed asset may be divided into the following two categories

Champion Company purchased and installed carpet in its new general offices on March 31 for a total cost of $18,000.The carpet is estimated to have a 15-year useful life and no residual value. ​

It is not necessary for a company to use the same depreciation method for financial statements and for determining income taxes.

XYZ Co.incurred the following costs related to the office building used in operating its sports supply company: ​ Classify each of the costs as a capital expenditure or a revenue expenditure.

A used machine with a purchase price of $77,000,requiring an overhaul costing $8,000,installation costs of $5,000,and special acquisition fees of $3,000,would have a cost basis of

​Newport Company has sales of $2,025,000 for the current year.The book value of its fixed assets at the beginning of the year was $550,000 and at the end of the year was $800,000.The fixed asset turnover ratio for Newport is

Which of the following statements is true?

An estimate of the amount for which an asset can be sold at the end of its useful life is called residual value.

The calculation for annual depreciation using the straight-line depreciation method is

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

Prior to adjustment at the end of the year,the balance in Trucks is $300,900 and the balance in Accumulated Depreciation-Trucks is $88,200.Details of the subsidiary ledger are as follows: Required:

Champion Company purchased and installed carpet in its new general offices on March 31 for a total cost of $18,000.The carpet is estimated to have a 15-year useful life and no residual value.

XYZ Co.incurred the following costs related to the office building used in operating its sports supply company: Classify each of the costs as a capital expenditure or a revenue expenditure.

Newport Company has sales of $2,025,000 for the current year.The book value of its fixed assets at the beginning of the year was $550,000 and at the end of the year was $800,000.The fixed asset turnover ratio for Newport is