Exam 10: Fixed Assets and Intangible Assets

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

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 4 years. Due to obsolescence, it was determined that the useful life should be shortened by 3 years and the residual value changed to zero. The depreciation expense for the current and future years is

Identify the following as a Fixed Asset (FA), or Intangible Asset (IA), or Natural Resource (NR), or Neither (N)

The calculation for annual depreciation using the straight-line depreciation method is

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

The Bacon Company acquired new machinery with a price of $15,200 by trading in similar old machinery and paying $12,700. The old machinery originally cost $9,000 and had accumulated depreciation of $5,000. In recording this transaction, Bacon Company should record

Xtra Company purchased goodwill from Argus for $96,000. Argus had developed the goodwill over 12 years. How much would Xtra amortize the goodwill for its first year?

Eagle Country Club has acquired a lot to construct a clubhouse. Eagle had the following costs related to the construction: Determine the cost of the Club House to be reported on the balance sheet.

Equipment was acquired at the beginning of the year at a cost of $75,000. The equipment was depreciated using the straight-line method based upon an estimated useful life of 6 years and an estimated residual value of $7,500.

The term applied to the amount of cost to transfer to expense resulting from a decline in the utility of intangible assets is

On June 1, 2014, Aaron Company purchased equipment at a cost of $120,000 that has a depreciable cost of $90,000 and an estimated useful life of 3 years and 30,000 hours. Using straight line depreciation, calculate depreciation expense for the last year.

Which of the following is included in the cost of constructing a building?

A new machine with a purchase price of $109,000, with transportation costs of $12,000, installation costs of $5,000, and special acquisition fees of $6,000, would have a cost basis of

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

When a company replaces a component of property, plant and equipment, which statement below does not account for one of the steps in the process?

When a property, plant, and equipment asset is sold for cash, any gain or loss on the asset sold should be recorded.

Machinery was purchased on January 1, 2010 for $51,000. The machinery has an estimated life of 7 years and an estimated salvage value of $9,000. Double-declining balance depreciation for 2011 would be

When determining whether to record an asset as a fixed asset, what two criteria must be met?

A capital expenditure results in a debit to

Determine the depreciation, for the year of acquisition and for the following year, of a fixed asset acquired on October 1 for $500,000, with an estimated life of 5 years, and residual value of $50,000, using (a) the declining-balance method at twice the straight-line rate and (b) the straight-line method. Assume a fiscal year ending December 31.