A) Measures the decline in market value of an asset B) Measures physical deterioration of an asset C) Is the process of allocating to expense the cost of a plant asset D) Is an outflow of cash from the use of a plant asset E) Is applied to land A) Measures the decline in market value of an asset B) Measures physical deterioration of an asset C) Is the process of allocating to expense the cost of a plant asset D) Is an outflow of cash from the use of a plant asset E) Is applied to land

On April 1,2010,SAS Corp.purchased and placed in service a plant asset.The following information is available regarding the plant asset: $\begin{array}{|l|r|} \hline \text { Acquisition cost } & \$ 130,000 \\ \hline \text { Estimated salvage value } & \$ 15,000 \\ \hline \text { Estimated useful life } & 5 \text { years } \\ \hline \end{array}$ Make the necessary adjusting journal entries at December 31,2010 and December 31,2010 to record depreciation for each year under the following depreciation methods: a. Straight-line b. Double-declining-balance.

a. \[\begin{array} { | l | l | l | l |

A company needed a new building.It found a suitable location with an existing old building on the land.The company reached an agreement to buy the land and the building for $960,000 cash.The old building was demolished to make way for the needed new building.Following is information regarding the demolition of the old building and construction of the new one: \[\begin{array}{l} \begin{array} { | l | r | } \hline \text { Construction cost of new building including } \$ 660,000\\ { \text { For parking lot } } & \$9 , 5 6 0 , 0 0 0 \\ \hline \text { Denolition of old buildirn } & 3 0 0 , 0 0 0 \\ \hline \text { Proceeds from sale of salvaged materials from old building } & 120,000 \\ \hline \end{array} \end{array}\] Prepare a single journal entry to record the above costs assuming all transactions are paid in cash.

\[\begin{array} { | l | r | r | } \hlin

Exam 8: Reporting and Analyzing Long-Term Assets

A new machine is expected to produce 600,000 units of product during its 8-year useful life.The machine cost $1,800,000 cash and it is estimated to have a $60,000 salvage value. If the machine produces 70,000 units of product during its first year,what is the depreciation for the first year as calculated by the units-of-production method?

(Essay)

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Question 141

A change in an accounting estimate is:

(Multiple Choice)

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Question 142

The _____________________ principle requires that companies report the amount of accumulated depreciation on plant assets as well as the depreciation methods used to determine the annual depreciation expense.

(Short Answer)

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Question 143

How is the cost principle applied to plant assets,acquisitions,including lump-sum purchases?

(Essay)

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Question 144

A new machine is expected to produce 600,000 units of product during its 8-year useful life.The machine cost $1,800,000 cash and it is estimated to have a $60,000 salvage value. If depreciation on the machine is calculated by the double-declining-balance method,what is the depreciation for the first year?

(Short Answer)

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Question 145

A company had net sales of $230,000 for 2010 and $288,000 for 2011.The company's average total assets for 2010 were $150,000 and $180,000 for 2011.Calculate the total asset turnover for each year and comment on the company's efficiency in the use of its assets.

(Essay)

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Question 146

Plant assets are used in everyday operations of the business and have useful lives that extend over more than one accounting period.

(True/False)

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Question 147

The three usual means for disposal of an asset are: _________________________________________________________.

(Short Answer)

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Question 148

A company exchanged its used machine for a new machine.The old machine cost $70,000 and the new one had a cash price of $95,000.The company had taken $60,000 depreciation on the old machine and was allowed a $2,500 trade-in allowance and the balance of $92,500 was paid in cash.What gain or loss should be recorded on the exchange?

(Essay)

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Question 149

Match each definition with its term

A condition which, because of new inventions and improvements, a plant asset is no longer useful in producing goods or services with a competitive advantage

Salvage value

Major repairs that extend the useful life of a plant asset beyond its original estimate

Extraordinary repairs

The process of allocating the cost of natural resources to the periods when they are consumed

Amortization

Correct Answer:

Verified

A condition which, because of new inventions and improvements, a plant asset is no longer useful in producing goods or services with a competitive advantage

Major repairs that extend the useful life of a plant asset beyond its original estimate

The process of allocating the cost of natural resources to the periods when they are consumed

An exclusive right granted to its owner to manufacture and sell an item or to use a process, for 20 years

Assets that increase the benefits of land, have a limited useful life and are subject to depreciation

A right granted that gives its owner the exclusive privilege to publish and sell musical, literary or artistic work during the life of the creator plus 50 years

The process of allocating the cost of an intangible asset to expense over its estimated useful life

An estimate of an asset's value at the end its benefit period

The total cost of a plant asset less its accumulated depreciation

The insufficient capacity of plant assets to meet the company's productive demands

(Matching)

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Question 150

Depreciation:

(Multiple Choice)

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Question 151

On April 1,2010 a company discarded a machine that had cost $10,000 and had accumulated depreciation of $8,000 as of December 31,2009.The asset had a 5-year life and no salvage value.Prepare the journal entries to record the updating of the depreciation expense and discarding of this asset.

(Essay)

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Question 152

On April 1,2010,SAS Corp.purchased and placed in service a plant asset.The following information is available regarding the plant asset: Acquisition cost \ 130,000 Estimated salvage value \ 15,000 Estimated useful life 5 years Make the necessary adjusting journal entries at December 31,2010 and December 31,2010 to record depreciation for each year under the following depreciation methods: a. Straight-line b. Double-declining-balance.

(Essay)

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Question 153

Describe the accounting for natural resources,including their acquisition,cost allocation and account titles.

(Essay)

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Question 154

_____________________ is an estimate of an asset's value at the end of its useful life.

(Short Answer)

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Question 155

On September 30 of the current year,a company acquired and placed in service a machine at a cost of $700,000.It has been estimated that the machine has a service life of five years and a salvage value of $40,000.Using the double-declining-balance method of depreciation,prepare a schedule showing depreciation amounts for the current year and the next 4 years (round answers to the nearest dollar).The company closes its books on December 31 of each year.

(Essay)

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Question 156

A company purchased equipment valued at $200,000 on January 1.The equipment has an estimated useful life of six years or five million units.The equipment is estimated to have a salvage value of $13,400.Assuming the straight-line method of depreciation,what is the book value at the end of the second year if 1.5 million units were produced?

(Multiple Choice)

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Question 157

Ace company purchased a machine valued at $320,000 on August 1.The equipment has an estimated useful life of five years or 2.5 million units.The equipment is estimated to have a salvage value of $8,200.Assuming the double declining balance method of depreciation,what is the amount of depreciation expense that needs to be recorded at the end of the second year if 710,000 units were produced?

(Multiple Choice)

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Question 158

Endor Fishing Company exchanged an old boat for a new one.The old boat had a cost of $260,000 and accumulated depreciation of $200,000.The new boat had an invoice price of $400,000.Endor received a trade in allowance of $100,000 on the old boat,which meant they paid $300,000 in addition to the old boat to acquire the new boat.What amount of gain or loss should be recorded on this exchange?

(Multiple Choice)

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Question 159

A company needed a new building.It found a suitable location with an existing old building on the land.The company reached an agreement to buy the land and the building for $960,000 cash.The old building was demolished to make way for the needed new building.Following is information regarding the demolition of the old building and construction of the new one: Construction cost of new building including \ 660,000 For parking lot \9 ,560,000 Denolition of old buildirn 300,000 Proceeds from sale of salvaged materials from old building 120,000 Prepare a single journal entry to record the above costs assuming all transactions are paid in cash.

(Essay)

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Question 160

Showing 141 - 160 of 212

A change in an accounting estimate is:

The _____________________ principle requires that companies report the amount of accumulated depreciation on plant assets as well as the depreciation methods used to determine the annual depreciation expense.

How is the cost principle applied to plant assets,acquisitions,including lump-sum purchases?

A company had net sales of $230,000 for 2010 and $288,000 for 2011.The company's average total assets for 2010 were $150,000 and $180,000 for 2011.Calculate the total asset turnover for each year and comment on the company's efficiency in the use of its assets.

Plant assets are used in everyday operations of the business and have useful lives that extend over more than one accounting period.

The three usual means for disposal of an asset are: _________________________________________________________.

Depreciation:

On April 1,2010 a company discarded a machine that had cost $10,000 and had accumulated depreciation of $8,000 as of December 31,2009.The asset had a 5-year life and no salvage value.Prepare the journal entries to record the updating of the depreciation expense and discarding of this asset.

Describe the accounting for natural resources,including their acquisition,cost allocation and account titles.

_____________________ is an estimate of an asset's value at the end of its useful life.

Introducing Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Receivables

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Investments and International Operations

Reporting and Analyzing Partnerships

Reporting and Preparing Special Journals

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