Exam 9: Fixed Assets and Intangible Assets

Convert each of the following estimates of useful life to a straight-line depreciation rate, stated as a percentage. 1) 2 years 2) 8 years 3) 10 years 4) 20 years 5) 25 years 6) 40 years 7) 50 years

Which of the following is included in the cost of constructing a building?

On December 31, Strike Company sold one of its batting cages for $50,000. The equipment had an original cost of $310,000 and has accumulated depreciation of $260,000. Depreciation has been recorded up to the end of the year. What is the amount of the gain or loss on this transaction?

When a company discards machinery that is fully depreciated, this transaction would be recorded with the following entry

Classify each of the following costs associated with long-lived assets as one of the following: -Repairs made to used office equipment

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-output method during a period when the asset was used for 4,500 hours.

Match the intangible assets described with their proper classification a-d). -I-Tunes music

On December 31, Strike Company sold one of its batting cages for $20,000. The equipment had an initial cost of $310,000 and had accumulated depreciation of $260,000. Depreciation has been recorded up to the end of the year. What is the amount of the gain or loss on this transaction?

Classify each of the following costs associated with long-lived assets as one of the following: -Costs of government permits required to develop land for a new business location

Classify each of the following as: -New landscaping

A capitalized asset will appear on the balance sheet as a long-term asset.

Standby equipment held for use in the event of a breakdown of regular equipment is reported as property, plant, and equipment on the balance sheet.

An intangible asset is one that has a physical existence.

On December 31, Strike Company traded-in one of its batting cages for another one that has a cost of $500,000. Strike receives a trade-in allowance of $11,000. The old equipment had an initial cost of $215,000 and has accumulated depreciation of $185,000. Depreciation has been recorded up to the end of the year. The difference will be paid in cash. What is the amount of the gain or loss on this transaction?

A fixed asset with a cost of $52,000 and accumulated depreciation of $47,500 is traded for a similar asset priced at $60,000 fair market value) in a transaction with commercial substance. Assuming a trade-in allowance of $5,000, at what cost will the new equipment be recorded in the books?

When selling a piece of equipment for cash, a loss will result when the proceeds of the sale are less than the book value of the asset.

Classify each of the following as: -Overhauling an engine in a large truck

A characteristic of a fixed asset is that it is

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 fair market value) in a transaction with commercial substance. Assuming a trade-in allowance of $4,000, at what cost will the new equipment be recorded in the books?

The double-declining-balance depreciation method calculates depreciation each year by taking twice the straight- line rate times the book value of the asset at the beginning of each year.