Exam 9: Long-Lived Assets

Any non refundable taxes incurred on the acquisition of an asset would be expensed at the time of acquisition.

Which of the following is an intangible asset that has a finite life?

If an intangible asset with an indefinite life becomes impaired, the asset must be

Goodwill has an indefinite life.

Below are selected entries for Econi Co. 1. The $60 cost of repairing a printer was charged to Computer Equipment. 2. The $5,000 cost of a major engine overhaul was debited to Repair Expense. The overhaul is expected to increase the operating efficiency of the truck. 3. The $6,000 closing costs associated with the acquisition of land were debited to Legal Expense. 4. A $600 charge for transportation costs on new equipment purchased was debited to Delivery Expense. 5. Freight cost incurred bringing a new piece of machinery to the plant site was charged to Machinery Instructions For each entry below make a correcting entry if necessary. If the entry given is correct, then state "No entry required."

A company purchased property for $300,000. The property included an acre of land valued at $50,000, a building valued at $150,000, and equipment valued at $125,000. -The equipment will be recorded at a cost of

In a disposal of an asset, if the carrying amount of the asset exceeds the proceeds received, profit will increase.

If the carrying amount of an asset equals its fair value at the date of sale,

If long-lived assets are intended for sale, they are included in property, plant, and equipment.

In the diminishing-balance method, the rate of depreciation decreases each year.

Intangible assets

A factory machine was purchased for $20,000 on March 1, 2014. It was estimated that it would have a $4,000 residual value at the end of its 5-year useful life. It was also estimated that the machine would be run 25,000 hours in the 5 years. If the actual number of machine hours run in 2014 was 4,000 hours and the company uses the units-of-production method of depreciation, the amount of depreciation expense for 2014 would be

Which of the following items qualify as land improvements?

In recording the acquisition cost of an entire business,

The calculation of depreciation using the diminishing-balance method

An intangible asset should

Accumulated depreciation is only recognized on natural resources that have been extracted and sold during the period.

Under International Financial Reporting Standards, the models which companies can choose to account for their long-lived assets are

Equipment was acquired on January 1, 2012, at a cost of $90,000. The equipment was originally estimated to have a residual value of $5,000 and an estimated life of 10 years. Depreciation has been recorded through December 31, 2013, using the straight-line method. On January 1, 2014, the estimated residual value was revised to $6,000 and the useful life was revised to a total of 8 years. Instructions Determine the depreciation expense for 2014.

Use the following information for question 166 - 167. Maverick Inc. exchanged an old vehicle for a new vehicle on August 31, 2014. The original cost of the vehicle was $45,000 on January 1, 2010. Depreciation was calculated using the straight line method over a ten-year useful life, with an estimated residual value of $3,000. The fair value of the old vehicle on August 31, 2014 was $21,500. The list price of the new vehicle was $30,000. Maverick received a $24,000 trade in allowance from the dealership and paid $6,000 cash for the new vehicle. -As a result of this transaction, the company would record which of the following?