Exam 9: Property, Plant and Equipment Intangibles

SportsWorld paid $140,000 for a property. The property included land appraised at $67,500, land improvements appraised at $25,000, and a building appraised at $55,500. What should be the allocation of costs in the accounting records (round calculations to 3 decimals)?

SportsWorld purchased property for $100,000. The property included a building, parking lot, and land. The building was appraised at $65,000; the land at $40,000; and the parking lot at $10,000. To the nearest dollar, the value of the land to be recorded in the books should be

Non-current assets are any liabilities that are used in the operations of a business.

Property, plant and equipment are assets held for sale.

The following information is available for a piece of A Company's machinery: On November 1, 2022, the electronic controller was replaced with a new one costing $8,000 purchased for cash. The new controller had an estimated residual value of $1,000 and an estimated useful life of 5 years. During 2022 the machinery was used for 3,200 hours from January 1 to October 31 and 650 hours from November 1 to December 31. Required: Record depreciation on machinery and the controller replacement for 2022. Round depreciation amounts to the nearest dollar.

When accumulated depreciation equals the asset's cost, the asset is fully depreciated. The entry to record the removal of the asset is called exchanging the equipment.

Vroom Company sold for $60,000 a machine that originally cost $100,000. The accumulated depreciation on this machine to date of sale was $47,000. What was Vroom Company's gain or loss on this sale?

An accelerated depreciation method yields smaller depreciation expense in the early years of an asset's life and larger charges in later years.

On January 1, 2020, Bailey Company purchased a machine for $106,000 that was expected to last five years and has a residual value of $6,000. At the beginning of 2023, Bailey decided that the machine's estimated useful life should be revised to a total of 6 years instead of 5. Also, the residual value was now estimated to be $5,500. Straight-line depreciation was used. Calculate the depreciation expense for 2023.

RoboCop Company paid $31,400 for a machine that was expected to last 5 years and have a residual value of $5,000. During the third year of the machine's life, $3,700 was paid for replacement parts that were expected to increase the machine's productivity by 20% each year. Prepare the general journal entry to record this transaction.

Dersch Co. purchased a machine on January 1, 2019, for $2,500,000. Using the table below, calculate the annual depreciation expense for each year of the machine's life (estimated at 5 years or 50,000 hours with a residual value of $150,000). During the machine's life, it was used 15,000; 14,000; 10,000; 9,000; and 6,000 hours. (a) (b) (c) Year straight Line Units d Praductim Declining Balance 2019 \ 470,000 \ 705,000 \ 1,000,000 2020 470,000 658,000 600,000 2021 470,000 470,000 360,000 2022 470,000 423,000 216,000 2023 470,000 54,000 44,400 Totals \ 2,350,000 \ 2,310,000 \ 2,220,400

On January 1, 2019, Boone Company purchased a machine for $75,000 that had a 6-year life and a residual value of $6,000. After 3 years of use, on January 1, 2022, Boone Company paid $7,500 to improve the efficiency of the machine. The effect of the expenditure was to increase the productivity of the machine without increasing its remaining useful life or changing its residual value. Boone uses straight-line depreciation. (1) What account should be debited in recording the $7,500 expenditure? (2) What amount of depreciation expense should be reported for 2022?

Gold Grain Construction (GGC) exchanged a three-year-old excavator for a new excavator that had a list price of $73,000, which was its fair value. The old excavator originally cost $85,000 and has accumulated depreciation of $45,000 to the date of exchange. In addition to the $45,000 trade-in given for the old excavator, GGC paid $8,000 cash to complete the deal. Record the asset exchange.

A machine was purchased for $37,000 and depreciated for 5 years on a straight-line basis under the assumption it would have a 10-year life and a $1,000 residual value. At the beginning of the machine's sixth year, it was recognized that it had 3 years of remaining life left, instead of five, and that at the end of the 3 years its residual value would be $1,600. What should the annual depreciation be for the machine's remaining years?

The straight-line method and the double-declining-balance method of depreciation

If the book value of a property, plant and equipment item is less than the amount to be recovered through the asset's use or sale, the difference is an impairment loss and the asset is described as impaired.

On January 4, 2020, SportsWorld purchased a patent for $35,000 with a useful life of 10 years. Prepare the journal entry to amortize the patent for the calendar year 2020.

Ad Hock had the following property, plant and equipment purchases during 2019: (1) On April 4, equipment costing $250,000 with a 5-year service life and an estimated $40,000 residual value was purchased. (2) On October 4, a machine costing $330,000 with a 5-year service life and an estimated $50,000 residual value was purchased. Assuming Ad Hock has a December 31 year end, prepare the necessary adjusting journal entries at December 31, 2019 to record depreciation under the following depreciation methods (using the nearest whole month method): (a) Straight-line (b) Double-declining-balance

Each year goodwill is examined to see if its value has been impaired. If the value has been impaired goodwill will

JoyCo acquired equipment on April 1, 2022, at a cost of $90,000 and with an estimated useful life of 10 years. The machine has a residual value of $10,000. JoyCo uses the double-declining-balance method of depreciation. How much depreciation should be recorded by JoyCo for the year ended December 31, 2022?