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

A company purchases a patent for $40,000.The patent will be amortized over 5 years.The entry to record the amortization in the first year is:

Equipment that originally cost $900 with no salvage value has accumulated depreciation of $700.The equipment is discarded.The transaction to record the discarding of the equipment would result in a:

When an asset is exchanged for a similar asset and a gain results,under accounting rules the gain is:

A computer server system,which had cost $250,000 and had accumulated depreciation of $170,000,was traded for a new system with a fair market value of $245,000.The old system and cash of $190,000 were given for the new system.Prepare the journal entry for the exchange of these similar assets.

The book value of an asset is calculated by taking the:

R.J.Berkshire incurred the following expenditures to buy new equipment: Invoice, subject to 4\% discount \ 22,000 Installation cost 1,500 Insurance for equipment after installation 300 Sales tax 1,200 Discount taken The amount the Equipment account will be debited for is ________.

What would the book value be at the end of year 6 for a piece of equipment using the straight-line method when cost is $11,000,residual value is $1,000,and the expected life is 10 years?

To record the depletion of natural resources,the most common method is to use the double declining-balance method.

The Loss on Disposal account is classified as another revenue account.

When equipment that is fully depreciated is discarded:

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 allocation of the cost of a intangible asset is known as:

Amortization of a patent was ignored.This error would cause:

A company purchased a new delivery van on January 1,2012 for $25,000.The company expects to use the van for 5 years and then sell it for $5,000.Complete the following depreciation table assuming straight-line depreciation: End of Year Cost of Delivery Van Depreciation Expense Accumulated Depreciation, End of Year Book Value, End of Year 1 2 3 4 5

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). -

Which of the following is an example of an intangible asset?

Double declining-balance method is used in the first year when straight-line should be used.This error would cause:

Ken Applegate owned equipment with an original cost of $45,000 with $38,000 of accumulated depreciation.The equipment was traded in on new equipment costing $55,000 with a trade-in allowance of $6,000 and the balance in cash.Determine the following. a.The book value of the old machine was ________. b.The loss on the exchange was ________. c.The cost basis on the books for the new machine,assuming accounting rules,is ________.

A task station that originally cost $5,000 has no estimated salvage value and was depreciated at the rate of 20% per year (straight-line depreciation).At the end of the second year,it was sold for $2,500 cash.The transaction would result in a:

Capital expenditures would include: