Question 1

Accumulated Depreciation

Accepted Answer

A)  is used to show the amount of cost expiration of intangibles 
B)  is the same as Depreciation Expense 
C)  is a contra asset account 
D)  is used to show the amount of cost expiration of natural resources 
A)  is used to show the amount of cost expiration of intangibles 
B)  is the same as Depreciation Expense 
C)  is a contra asset account 
D)  is used to show the amount of cost expiration of natural resources

Question 2

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

Accepted Answer

A)  salvage and functional 
B)  physical and functional 
C)  residual and salvage 
D)  functional and residual 
A)  salvage and functional 
B)  physical and functional 
C)  residual and salvage 
D)  functional and residual

Question 3

A machine with a cost of $75,000 has an estimated residual value of $5,000 and an estimated life of 4 years or 18,000 hours. What is the amount of depreciation for the second full year, using the double declining-balance method?

Accepted Answer

A)  $17,500 
B)  $37,500 
C)  $18,750 
D)  $16,667 
A)  $17,500 
B)  $37,500 
C)  $18,750 
D)  $16,667

Question 4

For each of the following fixed assets, determine the depreciation expense and the book value for the dates requested:
Disposal date is N/A if asset is still in use.
Method: SL = Straight Line; DDB = Double Declining Balance
Assume the estimated life was 5 years for each asset.
 $\begin{array}{|c|l|l|l|l|l|l|}
\hline \text { Depr Expense 2011 } & \text { Depr Method } & \text { Disposal date } & \text { Purchase Date } & \text { Residual Value } & \text { Cost } & \text { Item } \
\hline & \text { SL } & \text { N/A } & 7 / 1 / 2011 & \$ 4,000 & \$ 40,000 & \text { A } \
\hline & \text { SL } & \text { S/31/2011 } & 1 / 1 / 2009 & \$ 5,000 & \$ 50,000 & \text { B } \
\hline& \text { DDB } & \text { N/A } & 10 / 1 / 2011 & \$ 2,000 & \$ 60,000 & \text { C } \
\hline & \text { DDB } & 4 / 1 / 2011 & 1 / 1 / 2010 & \$ 10,000 & \$ 80,000 & \text { D } \
\hline & & & & & & \
\hline
\end{array}$

Accepted Answer

None

Question 5

Both the initial cost of the asset and the accumulated depreciation will be taken off the books with the disposal of the asset.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

Macon Co. acquired drilling rights for $7,500,000. The oil deposit is estimated at 37,500,000 gallons. During the current year, 3,000,000 gallons were drilled. Journalize the adjusting entry at December 31, 2011 to recognize the depletion expense.
Journal

Accepted Answer

@#IMG-DLM& *Depletion rate = cost / estimated size

Question 8

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

Accepted Answer

@#IMG-DLM& Amortized patent ri

Question 9

On July 1st, Harding Construction purchases a bulldozer for $330,000. The equipment has a 9 year life with a residual value of $15,000. Harding uses straight-line depreciation.
(a) Calculate the depreciation expense and provide the journal entry for the first year ending December 31st.
(b) Calculate the third year's depreciation expense and provide the journal entry for the third year ending December 31st.
(c) Calculate the last year's depreciation expense and provide the journal entry for the last year.
Annual depreciation is:

Accepted Answer

(a) First year depreciation is $35,000 x

Question 10

The cost of repairing damage to a machine during installation is debited to a fixed asset account.

Accepted Answer

A) True 
 B)False

Question 11

All of the following below are needed for the calculation of straight-line depreciation except

Accepted Answer

A)  cost 
B)  residual value 
C)  estimated life 
D)  units produced 
A)  cost 
B)  residual value 
C)  estimated life 
D)  units produced

Question 12

Equipment was purchased on January 5, 2011, at a cost of $90,000. The equipment had an estimated useful life of 8 years and an estimated residual value of $8,000.

Accepted Answer

After using the equipment for 3 years, t

Question 13

When a major corporation develops its own trademark and over time it becomes very valuable, the trademark may be shown on their balance sheet due to lack of a material cost.

Accepted Answer

A) True 
 B)False

Question 14

A fixed asset with a cost of $30,000 and accumulated depreciation of $28,500 is sold for $3,500. What is the amount of the gain or loss on disposal of the fixed asset?

Accepted Answer

A)  $2,000 loss 
B)  $1,500 loss 
C)  $3,500 gain 
D)  $2,000 gain 
A)  $2,000 loss 
B)  $1,500 loss 
C)  $3,500 gain 
D)  $2,000 gain

Question 15

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.
 a.Determine the depletion rate.
b.Detemine the amount of depletion expense for the current year:
c.Joumalize the adjusting entry to recognize the depletion expense.

Accepted Answer

The answer of Solare Company acquired mineral rights for $60,000,000....

Question 16

On December 31, Strike Company has decided to discard one of its batting cages. The initial cost of the equipment was $215,000 with an accumulated depreciation of $185,000. Depreciation has been taken up to the end of the year. The following will be included in the entry to record the disposal.

Accepted Answer

A)  Accumulated Depreciation Dr. $215,000 
B)  Loss on Disposal of Asset Dr. $185,000 
C)  Equipment Cr. $215,000 
D)  Gain on Disposal of Asset Cr. $30,000 
A)  Accumulated Depreciation Dr. $215,000 
B)  Loss on Disposal of Asset Dr. $185,000 
C)  Equipment Cr. $215,000 
D)  Gain on Disposal of Asset Cr. $30,000

Question 17

The cost of new equipment is called a revenue expenditure because it will help generate revenues in the future.

Accepted Answer

A) True 
 B)False

Question 18

Computer equipment was acquired at the beginning of the year at a cost of $63,000 that has an estimated residual value of $3,000 and an estimated useful life of 5 years. Determine the (a) depreciable cost (b) double-declining-balance rate, and (c) double-declining-balance depreciation for the first year.

Accepted Answer

(a) $60,00

Question 19

When land is purchased to construct a new building, the cost of removing any structures on the land should be charged to the building account.

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

A) True 
 B)False

Accumulated Depreciation

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

A machine with a cost of $75,000 has an estimated residual value of $5,000 and an estimated life of 4 years or 18,000 hours. What is the amount of depreciation for the second full year, using the double declining-balance method?

Both the initial cost of the asset and the accumulated depreciation will be taken off the books with the disposal of the asset.

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

Macon Co. acquired drilling rights for $7,500,000. The oil deposit is estimated at 37,500,000 gallons. During the current year, 3,000,000 gallons were drilled. Journalize the adjusting entry at December 31, 2011 to recognize the depletion expense. Journal

The cost of repairing damage to a machine during installation is debited to a fixed asset account.

All of the following below are needed for the calculation of straight-line depreciation except

Equipment was purchased on January 5, 2011, at a cost of $90,000. The equipment had an estimated useful life of 8 years and an estimated residual value of $8,000.

When a major corporation develops its own trademark and over time it becomes very valuable, the trademark may be shown on their balance sheet due to lack of a material cost.

A fixed asset with a cost of $30,000 and accumulated depreciation of $28,500 is sold for $3,500. What is the amount of the gain or loss on disposal of the fixed asset?

On December 31, Strike Company has decided to discard one of its batting cages. The initial cost of the equipment was $215,000 with an accumulated depreciation of $185,000. Depreciation has been taken up to the end of the year. The following will be included in the entry to record the disposal.

The cost of new equipment is called a revenue expenditure because it will help generate revenues in the future.

When land is purchased to construct a new building, the cost of removing any structures on the land should be charged to the building account.

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

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, Internal Control, and Cash

Receivables

Current Liabilities and Payroll

Corporations: Organization, Stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Filters

Exam 9: Fixed Assets and Intangible Assets

Accumulated Depreciation

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

A machine with a cost of $75,000 has an estimated residual value of $5,000 and an estimated life of 4 years or 18,000 hours. What is the amount of depreciation for the second full year, using the double declining-balance method?

Both the initial cost of the asset and the accumulated depreciation will be taken off the books with the disposal of the asset.

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

Macon Co. acquired drilling rights for $7,500,000. The oil deposit is estimated at 37,500,000 gallons. During the current year, 3,000,000 gallons were drilled. Journalize the adjusting entry at December 31, 2011 to recognize the depletion expense. Journal

The cost of repairing damage to a machine during installation is debited to a fixed asset account.

All of the following below are needed for the calculation of straight-line depreciation except

Equipment was purchased on January 5, 2011, at a cost of $90,000. The equipment had an estimated useful life of 8 years and an estimated residual value of $8,000.

When a major corporation develops its own trademark and over time it becomes very valuable, the trademark may be shown on their balance sheet due to lack of a material cost.

A fixed asset with a cost of $30,000 and accumulated depreciation of $28,500 is sold for $3,500. What is the amount of the gain or loss on disposal of the fixed asset?

On December 31, Strike Company has decided to discard one of its batting cages. The initial cost of the equipment was $215,000 with an accumulated depreciation of $185,000. Depreciation has been taken up to the end of the year. The following will be included in the entry to record the disposal.

The cost of new equipment is called a revenue expenditure because it will help generate revenues in the future.

When land is purchased to construct a new building, the cost of removing any structures on the land should be charged to the building account.

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

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, Internal Control, and Cash

Receivables

Current Liabilities and Payroll

Corporations: Organization, Stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Filters