Exam 9: Fixed Assets and Intangible Assets

Solare Company acquired mineral rights for $60,000,000.The diamond deposit is estimated at 6,000,000 tons.During the current year,2,300,000 tons were mined and sold.

The depreciation method that does not use residual value in calculating the first year's depreciation expense is

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 8 years.Determine the (a) depreciable cost, (b) straight-line rate,and (c) annual straight-line depreciation.

A 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 if using the double-declining balance method.

Journalize each of the following transactions:

Accumulated Depreciation

All leases are classified as either

A copy machine acquired on March 1,2011 with a cost of $1,410 has an estimated useful life of 3 years.Assuming that it will have a residual value of $150,determine the depreciation for the first and second year by the straight-line method.

The most widely used depreciation method is

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

In a lease contract,the party who legally owns the asset is the

The Weber Company purchased a mining site for $1,750,000 on July 1,2014.The company expects to mine ore for the next 10 years and anticipates that a total of 400,000 tons will be recovered.The estimated residual value of the property is $150,000.During 2014 the company extracted 6,500 tons of ore.The depletion expense for 2014 is

Patents are exclusive rights to manufacture,use,or sell a particular product or process.

The calculation for annual depreciation using the units-of-production method is

An exchange is said to have commercial substance if future cash flows remain the same as a result of the exchange.

When a company sells machinery at a price equal to its book value,this transaction would be recorded with an entry that would include the following:

Expected useful life is

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

The accumulated depletion account is

Computer equipment (office equipment)purchased 6 1/2 years ago for $170,000,with an estimated life of 8 years and a residual value of $10,000,is now sold for $60,000 cash.(Appropriate entries for depreciation had been made for the first six years of use. )Journalize the following entries: