Exam 16: Accounting for Property,plant,equipment,and Intangible Assets

Tender Years purchased a new van on January 1,201X,for $60,000.The life of the van is 5 years or 100,000 miles,with an estimated residual value of $5,000.During the first year,the van was driven 22,000 miles.Compute the depreciation expense for the first year applying each of the methods below. a)________ Straight-line b)________ Units-of-production c)________ Double declining-balance

A plant asset is fully depreciated when the book value is:

The cost of a plant asset was increased for the payment of this year's insurance premium.This error would cause:

When calculating declining balance depreciation,the straight-line rate was used instead of double the straight-line rate.In the first year of ownership,this error would cause:

For each of the following, identify in column 1 the category to which the account belongs, in column 2 the normal balance for the account, in column 3 the financial statement that the account in which the account balance is reported, and in column 4 the account's nature (permanent/temporary). -

The entry to record the purchase of a machine on account that costs $15,000,installation costs,$1,500,and freight,$700,would be:

Lacy purchased equipment for $76,000 on January 1.Its residual value is $4,000 with a useful life of 8 years.The amount of depreciation expense in the first year under the straight-line method is:

For each of the following, identify in column 1 the category to which the account belongs, in column 2 the normal balance for the account, in column 3 the financial statement that the account in which the account balance is reported, and in column 4 the account's nature (permanent/temporary). - Column 1 Column 2 Column 3 Column 4 Oil deposit

A tractor costing $180,000 is depreciated using MACRS.The tractor qualifies as a 3-year property,and has a scrap value of $20,000.The depreciation rates are: Year 1: 33.00\% Year 2: 45.00\% Year 3: 15.00\% Year 4: 7.00\% What is the depreciation expense for year 3?

A loss on the sale of a plant asset is listed as:

Yamara Company purchased a $80,000 machine on January 1.The machine is expected to have a useful life of 10 years or 60,000 operating hours and a residual value of $5,000.The machine was used for 6,000 hours in the first year and 4,400 hours in the second year.Compute the amount of depreciation expense for the first and second years under each of the methods below.

The entry to record the payment of an extraordinary repair of $5,000 that will extend the life of the machine 5 years,when the machine cost $30,000,and has accumulated depreciation of $26,000,is to:

Talarico's Subs purchased a new van for $28,000,its estimated useful life at 100,000 miles,residual value of $4,000.The van was driven 12,000 miles in year 1.What is the depreciation expense in year 1?

A gain on the sale of an asset occurs when:

Rockwell Industries purchased a plant asset to be used in its business.The expenditures included: Cost of machine \ 10,000 Special concrete base to support machine 400 Freight charges 1,500 Repair cost of damage incurred during installation 600 The Machine account will be debited for ________.

A loss on the sale of an asset would occur when:

Corbin Corporation has a plant asset with a cost of $40,000 that is traded for a similar asset priced at $70,000.Assuming accumulated depreciation of $15,000 and a trade-in allowance of $10,000,what is the cost basis for the new asset?

The difference between the item's cost and accumulated depreciation is the ________.

For tax purposes,the gain or loss on a traded asset is ignored when calculating the value of the new asset.

The depreciation method in which an even amount of depreciation expense is taken each year is called: