Exam 8: Reporting and Analyzing Long-Term Assets

The four main accounting issues for plant assets are: (1)_________________________, (2)_____________________________, (3)_________________________, (4)_____________________________.

A company sold a machine that originally cost $100,000 for $60,000 cash.The accumulated depreciation on the machine was $40,000.The company should recognize a:

Explain the impact,if any,on depreciation when depreciation estimates change.

A company purchased a machine for $75,000 that was expected to last 6 years and have a salvage value of $6,000.At the beginning of the machine's fourth year the company decided that the machine's estimated useful life should be revised to a total of 10 years instead of 6 years.Also,the salvage value was re-estimated to be $5,500.Straight-line depreciation was used throughout the machine's life.Calculate the depreciation expense for the fourth year of the machine's useful life.

Both the straight-line depreciation method and the double-declining-balance depreciation method:

Explain the difference between revenue expenditures and capital expenditures and how they are recorded in the accounting system.

A company entered into the following transactions concerning its computer system: On January 1,2009 purchased a computer system that cost $1,480,000.The estimated useful life of the computer is 3 years and salvage value is $40,000.Straight-line depreciation is to be used.On January 1,2010 the company determined that the estimated useful life of the computer would be 4 years instead of 3 years.The estimated salvage value will only be $10,000. a. Prepare the journal entry to record depreciation expense for 2010. b. Prepare the journal entry to record depreciation expense for 2010.

_______________________ are expenditures that extend an asset's useful life beyond its original estimate.

Plant assets are:

Total asset turnover is used to evaluate:

A company paid $314,000 for a machine that was expected to last five years and have a salvage value of $40,000.During the third year of the machine's life,$37,000 cash was paid for replacement parts that were expected to increase the machine's productivity by 10% each year.Prepare the journal entry to record the $37,000 cost incurred in the third year.

Once the estimated depreciation expense for an asset is calculated:

A plant asset's useful life might not be the same as its productive life.

Ordinary repairs are expenditures that keep assets in normal,good operating condition.

Blanket Corporation sold equipment for cash of $40,500.Accumulated depreciation on the sale date amounted to $34,000 and a loss of $1,800 was recognized on the sale. What was the original cost of the asset?

A company bought a new display case for $42,000 and was given a trade-in of $2,000 on an old display case,so the company paid $40,000 cash with the trade-in.The old case had an original cost of $37,000 and accumulated depreciation of $34,000.The company should record the value of new display case at:

Explain (in detail)how to compute each of the following depreciation methods: straight-line,units-of-production and double-declining-balance.

Gain or loss on the disposal of an asset is determined by comparing "value given" (book value)to "value received".

The total cost of an asset less its accumulated depreciation is called: