Exam 7: Fixed Assets and Intangible Assets

A patent was purchased for $670,000 with a legal life of 20 years.Management estimates that the patent has an 12-year economic life.The entry to record amortization would include

If a capital expenditure is treated as a revenue expenditure,then

Long-lived assets that are intangible in nature,used in the operations of the business,and not held for sale in the ordinary course of business are called fixed assets.

Which of the following is NOT an intangible asset?

When selling a piece of equipment for cash,a loss will result when the proceeds of the sale are greater than the book value of the asset.

Which method of depreciation considers residual value in computing the normal periodic depreciation?

Intangible assets are used in operations but

To measure depreciation,all of the following must be known EXCEPT

Recording depreciation

For each of the following items indicate whether the transactions listed below increased (+),decreased (-)or had no effect (o)by inserting the appropriate symbol.

A pressurized spray painter was purchased on April 1 of the fiscal year for $3,900.It has a useful life of 4 years and a residual value of $300.Determine depreciation expense for the first two years,assuming a fiscal year end of December 31 and using (a)the straight-line method and (b)the double-declining-balance method.

The Accumulated Depreciation account is deducted from the cost of fixed assets on the balance sheet.

If a revenue expenditure is treated as a capital expenditure,then

A company sold a delivery truck for $18,000 cash.The truck cost $47,500 and had accumulated depreciation of $36,000 as of the date of sale.The entry to record the sale would include

Expenditures for research and development are generally recorded as

Which of the following is an example of a capital expenditure?

The removal of an old building to make the land ready for its intended use is charged to

A company acquired mineral rights for $7,500,000.The mineral deposit is estimated at 600,000 tons and during the year 100,000 tons were extracted and sold.

Other descriptive titles for fixed assets would include

Depreciable cost equals