Exam 8: Operating Assets: Property, plant, and Equipment, and Intangibles

Sheffield Ridge Co.purchased new trucks at the beginning of 2012 for $600,000.The trucks had an estimated life of 4 years and an estimated residual value of $50,000.Sheffield Ridge uses straight-line depreciation.At the beginning of 2013,Sheffield Ridge sold the trucks for $480,000 and purchased new trucks for $700,000.Determine the following amounts:

Greeley,Inc.purchased slot machines at the beginning of 2012 for $20,000.The machines have an estimated residual value of $2,000 and an estimated life of 5 years or 20,000 hours of operation.Greeley is looking at alternative depreciation methods for the equipment.Calculate the following:

Depreciation is

Grover,Inc. Grover,Inc.purchased a crane at a cost of $80,000.The crane has an estimated residual value of $5,000 and an estimated life of 8 years,or 12,500 hours of operation.The crane was purchased on January 1,2013 and was used 2,700 hours in 2013 and 2,600 hours in 2014. Refer to the information about Grover,Inc. If Grover uses the double-declining-balance depreciation method,what amount is the depreciation expense for 2014?

Operating assets with no physical properties are called

Please complete the following sentences: a.Accumulated amortization is used with ______________________________________. b.Accumulated depreciation is used with ______________________________________.

Yu Corporation Use the following Assets section of Yu Corporation's balance sheets for the years ended December 31,2013 and 2012 to answer the questions that follow. Yu Corporation recorded depreciation expense of $344 million for 2012. Refer to the information for Yu Corporation. Required: (1)Explain the impact on net income and cash flows of Yu using straight-line depreciation for financial reporting and accelerated depreciation methods for income tax purposes. (2)In the notes to the financial statements,Yu indicates that it uses different depreciation methods for different types of plant and equipment assets.Explain why Yu might follow this policy.

Florence,Inc.purchased equipment at the beginning of 2014 for $140,000.The company decided to depreciate the equipment over a 10-year period using the double-declining-balance method.The company estimated the equipment's salvage value at $12,000.Show how the costs should be presented on Florence's financial statements at December 31,2015.Label the statements properly.

Which of the following factors is not related to the decline in the usefulness of plant and equipment assets,and therefore does not need to be considered in selecting an appropriate depreciation method?

All of the following are included in the acquisition cost of property,plant,and equipment except:

All of the following are intangible assets except

Darrin Brown bought a pub.The purchase price was $695,000.An appraiser provided the following appraisal values: land $320,000: building $370,000 and equipment $60,000.What cost should be allocated to the building?

For each of the following sentences 11-14,select the word or group of words that best completes the statement. ____________________________________ is (are)the expenditure(s)incurred in the discovery of new knowledge and the translation of research into a design or plan for a new product.

Interest is capitalized on all purchased assets.

Battery Corp.purchased equipment with a cost of $70,000 at the beginning of 2013.The equipment has an estimated life of 25 years or 25,000 units of product.The estimated residual value is $7,500.During 2013,1,100 units of product were produced with this machinery.Determine the following:

Creighton,Inc.determined that it had incorrectly estimated both the useful life and the estimated residual value of equipment which it purchased 2 years ago.When accounting for the change in its accounting estimates,Creighton must

What is the relationship between the depreciation method chosen and income taxes paid in the early years? Explain.

Royal Company purchased a dump truck at the beginning of 2012 at a cost of $50,000.The truck had an estimated life of 5 years and an estimated residual value of $20,000.On January 1,2014,the company made major repairs of $30,000 to the truck that extended the life 3 years.Thus,starting with 2014,the truck has a remaining life of 5 years and a new salvage value of $8,000.Royal uses the straight-line depreciation method What amount should be recorded as depreciation expense each year starting in 2014?

Explain how the costs associated with operating assets are reported on the balance sheet.

Duggard Transport Company On January 1,2013,Duggard Transport Company purchased a ship for $2,000,000.It has a ten-year useful life and a residual value of $50,000.The company uses the double-declining-balance method. What was the depreciation expense for Duggard Transport for the year ended December 31,2013?