Question 1

The name, term, or symbol used to identify a business and its products is called

Accepted Answer

A)  goodwill 
B)  a patent 
C)  a trademark 
D)  a copyright

Question 2

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

Question 3

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 4

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

Accepted Answer

A) Land improvements 
B) Buildings 
C) Land 
D) Machinery and equipment

Question 5

A machine costing $57,000 with a six-year life and $54,000 depreciable cost was purchased January 1. Compute the yearly depreciation expense using straight-line depreciation.

Accepted Answer

The answer of A machine costing $57,000 with a six-year...

Question 6

Expected useful life is

Accepted Answer

A)  calculated when the asset is sold 
B)  estimated at the time that the asset is placed in service 
C)  determined each year that the depreciation calculation is made 
D)  None of these choices

Question 7

Classify each of the following as:
-New landscaping

Accepted Answer

A) Ordinary maintenance and repairs 
B) Asset improvements 
C) Extraordinary repairs

Question 8

The cost of computer equipment does not include the consultant's fee to supervise installation of the equipment.

Accepted Answer

A) True 
 B)False

Question 9

The double-declining-balance method of depreciation uses a declining percentage rate in determining the depreciation amount.

Accepted Answer

A) True 
 B)False

Question 10

Match each account name to the financial statement section (a-i) in which it would appear.
-Loss from Impaired Goodwill

Accepted Answer

A) Current assets 
B) Fixed assets 
C) Intangible assets 
D) Current liability 
E) Long-term liability
F)Owner's equity
G)Revenues
H)Operating expenses
I)Other revenue and expense

Question 11

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

Accepted Answer

A)  lessee 
B)  lessor 
C)  operator 
D)  banker

Question 12

Classify each of the following costs associated with long-lived assets as one of the following:
-Walkways to surround new business location

Accepted Answer

A) Land improvements 
B) Buildings 
C) Land 
D) Machinery and equipment

Question 13

The amount of depreciation expense for the first full year of use of a fixed asset costing $95,000, with an estimated residual value of $5,000 and a useful life of five years, is $19,000 by the straight-line method.

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

Champion Company purchased and installed carpet in its new general offices on March 31 for a total cost of $18,000. The carpet is estimated to have a 15-year useful life and no residual value.​
(a)Prepare the journal entries necessary for recording the purchase of the new carpet.
(b)​Record the December 31 adjusting entry for the partial-year depreciation expense for the carpet assuming that Champion Company uses the straight-line method.

Accepted Answer

The answer of Champion Company purchased and installed carpet in...

Question 16

The amount of depreciation expense for a fixed asset costing $95,000, with an estimated residual value of $5,000 and a useful life of five years or 20,000 operating hours, is $21,375 by the units-of-activity method during a period when the asset was used for 4,500 hours.

Accepted Answer

A) True 
 B)False

Question 17

A machine with a cost of $120,000 has an estimated residual value of $15,000 and an estimated life of five years or 15,000 hours. It is to be depreciated by the units-of-activity method. What is the amount of depreciation for the second full year, during which the machine was used 5,000 hours?

Accepted Answer

A)  $5,000 
B)  $35,000 
C)  $21,000 
D)  $45,000

Question 18

Comment on the validity of the following statements. "As an asset loses its ability to provide services, cash needs to be set aside to replace it. Depreciation accomplishes this goal."

Accepted Answer

The answer of Comment on the validity of the following...

Question 19

Fill in the missing numbers using the formula for fixed asset turnover:​ $$\begin{array} { | l | r | r | r | r | } 
\hline & \text { Company A } & \text { Company B } & \text { Company C } & \text { Company D } \
\hline \text { Sales } & \$ 5,000,000 & \$ 720,000 & \$ 900,000 & ? \
\hline \text { Beginning fixed assets } & \$ 450,000 & \$ 275,000 & ? & \$ 380,000 \
\hline \text { Ending fixed assets } & \$ 800,000 & ? & \$ 310,000 & \$ 420,000 \
\hline \text { Fixed asset turnover } & ? & 2.4 & 3.0 & 2.6 \
\hline
\end{array}$$

Accepted Answer

The answer of Fill in the missing numbers using the...

Question 20

Equipment costing $80,000 with a useful life of 10 years and a residual value of $8,000 has been depreciated for six years by the straight-line method. Assume a fiscal year ending December 31.
(a)What is the book value at the end of the sixth year of use?
(b)If early in the seventh year it is estimated that the remaining useful life is five years 
(instead of four) and the residual value is $6,000, what is the amount of depreciation for the seventh year?

Accepted Answer

The answer of Equipment costing $80,000 with a useful life...

Exam 10: Long-Term Assets: Fixed and Intangible

The name, term, or symbol used to identify a business and its products is called

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

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

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

A machine costing $57,000 with a six-year life and $54,000 depreciable cost was purchased January 1. Compute the yearly depreciation expense using straight-line depreciation.

Expected useful life is

Classify each of the following as: -New landscaping

The cost of computer equipment does not include the consultant's fee to supervise installation of the equipment.

The double-declining-balance method of depreciation uses a declining percentage rate in determining the depreciation amount.

Match each account name to the financial statement section (a-i) in which it would appear. -Loss from Impaired Goodwill

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

Classify each of the following costs associated with long-lived assets as one of the following: -Walkways to surround new business location

The amount of depreciation expense for the first full year of use of a fixed asset costing $95,000, with an estimated residual value of $5,000 and a useful life of five years, is $19,000 by the straight-line method.

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

The amount of depreciation expense for a fixed asset costing $95,000, with an estimated residual value of $5,000 and a useful life of five years or 20,000 operating hours, is $21,375 by the units-of-activity method during a period when the asset was used for 4,500 hours.

A machine with a cost of $120,000 has an estimated residual value of $15,000 and an estimated life of five years or 15,000 hours. It is to be depreciated by the units-of-activity method. What is the amount of depreciation for the second full year, during which the machine was used 5,000 hours?

Comment on the validity of the following statements. "As an asset loses its ability to provide services, cash needs to be set aside to replace it. Depreciation accomplishes this goal."