Exam 8: Long-Term Assets

Computing depletion expense is much like computing depreciation under the straight-line method.

Jimmie Company made a basket purchase involving four assets. Their market values were A: $45,000; B: $37,500; C: $41,000; and D: $53,000. The price Jimmie paid for the four assets was $145,000. To the nearest dollar, what final price will Jimmie record for asset D?

Patents and copyrights represent the rights conveyed to the owners of these tangible assets.

Items such as minerals are considered natural resources.

To which account should title transfer fees be recorded?

After 4 years, a machine had an accumulated depreciation of $38,000. The machine had an anticipated life of 8 years and a residual value of $5,000. If the current book value after 4 years is $28,000 and the machine has only 2 years of useable life left, how much will be depreciated in Year 5 and in Year 6 using the straight-line method of depreciation, and assuming the residual value is still $5,000?

For each of the following situations, record the journal entries required. On February 1, 2014, Alloy Company purchased $5,000 of merchandise from Alysou Company on account, terms 2/15, n/30, FOB shipping point. The goods cost Alysou $2,900. Alysou uses the perpetual inventory method. On March 1, Alysou purchased a patent for $6,000. The patent was registered with the Canadian Intellectual Property Office 8 years ago. Alysou estimated that it would keep the patent for 8 years. Amortization is recorded on December 31. On April 23, Lauren paid $4,650 to Alysou Company to fulfill her promissory note agreement. Of the $4,650, $650 is interest. A year end physical count is performed for Alysou Company and it is determined that $25,240 worth of inventory is on hand on December 31. The balance sheet has a value of $26,700 as the inventory balance.

The slogan "Can you hear me now?" for Verizon is a protected slogan called a:

Timber, coal, and other minerals are long-term assets called natural resources.

Investments in debt securities, such as bonds, are typically classified as "other long-term assets."

Which of the following accounts would be debited as "something you got" in a journal entry for an asset exchange?

Under Canadian ASPE when is it required that the impairment test occur?

Amortization is computed over the useful life of the intangible asset using the double-declining-balance method.

Which of the following would NOT be a part of land improvements?

The cost of removing unwanted buildings from land would be allocated to which account?

When determining the cost of a plant asset, both IFRS and Canadian ASPE require the use of the market value principle.

After an asset is fully depreciated, at what amount is the asset kept on the book?

Which type of marketable securities do not report increases or decreases in value on the income statement?

A building was purchased on August 1, 2012 for $450,000. It has a residual value of $38,000 and a useful life of 35 years. To the nearest dollar, how much will the depreciation expense for the building be for 2012 using the double-declining-balance method?

When is an asset considered impaired?