Exam 8: Long-Term Assets

Brandon Corporation purchased a vein of mineral ore for $3,250,000. It is estimated that 15,000,000 tons of ore are available to be extracted. The residual value is determined to be $400,000. What is the depletion expense for this year's extraction of 1,760,000 tons of ore (rounded to the nearest dollar)? What is the journal entry?

Ryan Corporation made a basket purchase of three items. Item A was appraised at $35,000; item B was appraised at $55,000; and item C was appraised at $60,000. The purchase price was $125,000. The amount at which item A should be recorded (rounded to the nearest dollar) is __________.

Lobella Corporation purchased Melissa Industries on January 1, 2012. At the time of the purchase, the market value of Melissa's assets is $920,000 and its liabilities total $580,000. Lobella pays $500,000 for Melissa. Calculate the Goodwill and record the journal entry to record the purchase.

Prepare journal entries for the following transactions for Jacob Company. Sept 2 Replaced the engine in Tractor #1, paying cash, $7,200. Sept 5 Paid cash for an engine tune-up in Tractor #2, $630.

Ryan Corporation made a basket purchase of three items. Item A was appraised at $35,000; item B was appraised at $55,000; and item C was appraised at $60,000. The purchase price was $125,000. At what amount should item B be recorded?

A company pays $98,000 for a copyright and it is estimated that the useful life is ten years. What is the journal entry to record its amortization at year end?

Ryan Corporation made a basket purchase of three items. Item A was appraised at $35,000; item B was appraised at $55,000; and item C was appraised at $60,000. The purchase price was $125,000 and a note was signed. What is the journal entry to record this purchase?

The old truck is an example of what might be debited as "what you got" in a transaction involving an exchange of assets.

How often should goodwill be tested for impairment under IFRS?

What is a repair that extends the useful life of an asset?

To which account should the cost of installing fences be recorded?

DDB balance is an accelerated method of calculating depreciation where residual value is not part of the initial computation.

Would adding 30 rooms to an existing hotel be considered a betterment or an extraordinary repair?

It is determined that a computer's depreciation expense for the year is $3,500. What is the journal entry to record this?

A company purchased a truck on August 1, 2012 and uses straight-line depreciation. For how many months would the company depreciate the asset in 2012?

Whether a building is purchased or constructed, the same items are used to compute the price of the building.

A truck costing $56,000 has accumulated depreciation of $50,000. The truck is scrapped for $500. What is the journal entry to record this transaction?

Do we record the sales taxes on the purchase of machinery to an asset or expense account? Be specific as to which asset or expense account.

Replacing an engine on a delivery truck would be considered a betterment.

If "what you gave up" is more than "what you got," is a gain or loss recognized?