Question 1

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:

Accepted Answer

The answer of Computer equipment (office equipment) purchased 6 1/2...

Question 2

A fixed asset with a cost of $41,000 and accumulated depreciation of $36,000 is traded for a similar asset priced at $50,000. Assuming a trade-in allowance of $4,000, the cost basis of the new asset is

Accepted Answer

A)  $54,000 
B)  $45,000 
C)  $51,000 
D)  $50,000

Question 3

Prepare the following journal entries and calculations:

Accepted Answer

The answer of Prepare the following journal entries and calculations:
...

Question 4

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 5 years or 20,000 operating hours, is $21,375 by the units-of-production method during a period when the asset was used for 4,500 hours.

Accepted Answer

A) True 
 B)False

Question 5

A copy machine acquired with a cost of $1,410 has an estimated useful life of 4 years. It is also expected to have a useful operating life of 13,350 copies. Assuming that it will have a residual value of $75, determine the depreciation for the first year by the

Accepted Answer

The answer of A copy machine acquired with a cost...

Question 6

The journal entry for recording an operating lease payment would

Accepted Answer

A)  be a memo entry only 
B)  debit the fixed asset and credit Cash 
C)  debit an expense and credit Cash 
D)  debit a liability and credit Cash

Question 7

As a company records depreciation expense for a period of time a corresponding cash inflow from investing activities is reported on the statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 8

On July 1, 2010, Howard Co. acquired patents rights for $40,000. The patent has a useful life of 8 years and a legal life of 15 years. Journalize the adjusting entry on December 31, 2010 to recognize the amortization.
Journal

Accepted Answer

The answer of On July 1, 2010, Howard Co. acquired...

Question 9

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

Accepted Answer

A)  amortization 
B)  depletion 
C)  depreciation 
D)  allocation

Question 10

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

Question 11

The double-declining-balance method is an accelerated depreciation method.

Accepted Answer

A) True 
 B)False

Question 12

Which intangible assets are amortized over their useful life?

Accepted Answer

A)  trademarks 
B)  goodwill 
C)  patents 
D)  all of the above

Question 13

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

Accepted Answer

A)  $114,000 
B)  $126,000 
C)  $121,000 
D)  $132,000

Question 14

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 15

Revising depreciation estimates does affect the amounts of depreciation expense recorded in past periods.

Accepted Answer

A) True 
 B)False

Question 16

It is necessary for a company to use the same depreciation method for all of its depreciable assets.

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

Fixed assets are ordinarily presented in the balance sheet

Accepted Answer

A)  at current market values 
B)  at replacement costs 
C)  at cost less accumulated depreciation 
D)  in a separate section along with intangible assets

Question 19

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 5 years, is $19,000 by the straight-line method.

Accepted Answer

A) True 
 B)False

Question 20

When exchanging equipment, if the trade-in allowance is greater than the book value a loss results.

Accepted Answer

A) True 
 B)False

Exam 10: Fixed Assets and Intangible Assets

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:

A fixed asset with a cost of $41,000 and accumulated depreciation of $36,000 is traded for a similar asset priced at $50,000. Assuming a trade-in allowance of $4,000, the cost basis of the new asset is

Prepare the following journal entries and calculations:

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 5 years or 20,000 operating hours, is $21,375 by the units-of-production method during a period when the asset was used for 4,500 hours.

A copy machine acquired with a cost of $1,410 has an estimated useful life of 4 years. It is also expected to have a useful operating life of 13,350 copies. Assuming that it will have a residual value of $75, determine the depreciation for the first year by the

The journal entry for recording an operating lease payment would

As a company records depreciation expense for a period of time a corresponding cash inflow from investing activities is reported on the statement of cash flows.

On July 1, 2010, Howard Co. acquired patents rights for $40,000. The patent has a useful life of 8 years and a legal life of 15 years. Journalize the adjusting entry on December 31, 2010 to recognize the amortization. Journal

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

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

The double-declining-balance method is an accelerated depreciation method.

Which intangible assets are amortized over their useful life?

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

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

Revising depreciation estimates does affect the amounts of depreciation expense recorded in past periods.

It is necessary for a company to use the same depreciation method for all of its depreciable assets.

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

Fixed assets are ordinarily presented in the balance sheet

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 5 years, is $19,000 by the straight-line method.

When exchanging equipment, if the trade-in allowance is greater than the book value a loss results.