Exam 10: Long-Term Assets: Fixed and Intangible

A machine costing $185,000 with a five-year life and $20,000 residual value was purchased January 2.Compute depreciation for each of the five years,using the double-declining-balance method.

The double-declining-balance rate for calculating depreciation expense is determined by doubling the straight-line rate.Assuming that an asset has a useful life of 25 years,determine the rate to be used under the double-declining-balance method.

Expected useful life is

Land acquired so it can be resold in the future is listed on the balance sheet as a (n)

The transfer to expense of the cost of intangible assets attributed to the passage of time or decline in usefulness is called amortization.

Identify each of the following expenditures as chargeable to (a)Land, (b)Land Improvements, (c)Buildings, (d)Machinery and Equipment,or (e)other account.

Intangible assets differ from property,plant,and equipment assets in that they lack physical substance.

Classify each of the following costs associated with long-lived assets as one of the following: -Interest on money borrowed to finance construction of new office building

Match the intangible assets described with their proper classification (a-d). ​ -A new kitchen gadget that can be produced by only one company

Match each account name to the financial statement section (a-i) in which it would appear. -Depreciation Expense

Which of the following are criteria for determining whether to record an asset as a fixed asset?

The units-of-activity depreciation method provides a good match of expenses against revenue.

When the amount of use of a fixed asset varies from year to year,the method of determining depreciation expense that best matches allocation of cost with revenue is

A machine costing $57,000 with a six-year life and $54,000 depreciable cost was purchased January 1.Compute the yearly depreciation expense using straight-line depreciation.

The double-declining-balance depreciation method calculates depreciation each year by taking twice the straight-line rate times the book value of the asset at the beginning of each year.

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

An asset was purchased for $120,000 on January 1,Year 1 and originally estimated to have a useful life of 10 years with a residual value of $10,000.At the beginning of the third year,it was determined that the remaining useful life of the asset was only four years with a residual value of $2,000.Calculate the third-year depreciation expense using the revised amounts and straight-line method.

Machinery is purchased on July 1 of the current fiscal year for $240,000.It is expected to have a useful life of four 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:​

The amount of the depreciation expense for the second full year of use of a fixed asset costing $100,000,with an estimated residual value of $5,000 and a useful life of four years,is $25,000 by the double-declining-balance method.

Though a piece of equipment is still being used,the equipment should be removed from the accounts if it has been fully depreciated.