Exam 10: Long-Term Assets: Fixed and Intangible

On June 1,Aaron Company purchased equipment at a cost of $120,000 that has a depreciable cost of $90,000 and an estimated useful life of three years and 30,000 hours,which ends on December 31.​Using straight-line depreciation,calculate depreciation expense for the final (partial)year of service.​

The journal entry for recording payment for the short-term lease of a fixed asset would

On December 31,Bowman Company estimated that goodwill of $80,000 was impaired.On June 1,a patent with an estimated useful economic life of 10 years was acquired for $252,000.​Required (a) Journalize the adjusting entry on December 31 for the impaired goodwill. (b) Journalize the adjusting entry on December 31 for the amortization of the patent rights.

On April 15,Compton Co.paid $2,800 to upgrade a delivery truck and $125 for an oil change.Journalize the entries for the upgrade to the delivery truck and oil change expenditures.

On December 31,Strike Company sold one of its batting cages for $20,000.The equipment had an initial 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?

Costs associated with normal research and development activities should be treated as intangible assets.

Accumulated Depreciation

Equipment with a cost of $160,000,an estimated residual value of $40,000,and an estimated life of 15 years was depreciated by the straight-line method for four years.Due to obsolescence,it was determined that the remaining useful life should be shortened by three years and the residual value changed to zero.The depreciation expense for the current and future years is

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.

Classify each of the following costs associated with long-lived assets as one of the following: -Fees paid to architect to design new office building

Classify each of the following costs associated with long-lived assets as one of the following: -Paved parking areas at new business location

Computer equipment was acquired at the beginning of the year at a cost of $65,000 that has an estimated residual value of $3,800 and an estimated useful life of eight years.Determine the (a)depreciable cost, (b)straight-line rate,and (c)annual straight-line depreciation.

It is necessary for a company to use the same depreciation method for all of its depreciable assets.

Classify each of the following as: -Fixing damage due to a car accident

Which of the following should be included in the acquisition cost of a piece of equipment?

Which of the following statements is true?

Losses on the discarding of fixed assets are reported in the income statement.

Land acquired as a speculation is reported under Investments on the balance sheet.

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

What is the cost of the land,based on the following data?