Exam 8: Long-Term Assets

Assets that come from the earth and can ultimately be used up are called __________.

A company purchased furniture on January 1, 2012. Its cost was $15,600 and it had a residual value of $1,600. Its useful life is determined to be 3 years. Using double-declining balance depreciation, record the journal entry to record depreciation expense in 2013.

Meranda Corporation purchases a machine for $125,000. It has an estimated residual value of $10,000 and is expected to produce 50,000 units in its lifetime. During the first year of operation, it produced 14,500 units. To the nearest dollar, the depreciation for the first year under the units of production method will be __________.

Andy Industries is making a basket purchase of 4 items for $550,000 for cash. The current market values of the items are as follows: Equipment $133,000 Furniture: $147,000 Trucks: $127,000 Fixtures: $168,000 Calculate to the nearest dollar the amount at which Andy Industries should value each item and write the journal entry for this basket purchase on April 14, 2011. Equipment: $__________ Furniture: $__________ Trucks: $__________ Fixtures: $__________

The depreciation method in which the depreciable cost of an asset is apportioned equally over its estimated life in terms of month or years is called the __________.

Interest and dividends earned during the period are reported on the income statement for which kind of marketable securities?

What is another name for assets that cannot be seen, touched, or held?

Suppose Arian Industries pays $120,000 on January 1 to purchase a patent on a new manufacturing process. Arian Industries believes this patent's useful life is six years. Record the journal entries to record the purchase and the amortization.

What do "other long-term assets" typically consist of?

Dimitri Company has a delivery truck that was purchased for $42,000 and has a residual value of $5,000. It expects the truck to last 125,000 kilometres. During Year 1, the truck traveled 32,500 kilometres and during Year 2, the truck traveled 28,500 kilometres. What is the depreciation expense for Year 2 to the nearest dollar using the units-of-production method? (Round to three decimal places to get the unit rate.) Record the journal entry required in year 2 to record depreciation.

Property, plant, and equipment are not shown at net book value on the balance sheet.

Which intangible asset is recorded only when an acquiring company purchases another company?

Under Canadian ASPE, at what value is Property, Plant, and Equipment recorded on the balance sheet?

Rick Corporation purchased a vein of coal ore for $3,500,000. It is estimated that 25,000,000 tons of ore are available to be extracted. The residual value is determined to be $150,000. The estimated depletion rate for each ton of ore (rounded to the nearest cent) is:

Marketable securities that are managed and held until the due date of the securities are:

Sorine Industries inadvertently debited a $5,000 betterment as an ordinary expense. What is the balance sheet effect of this mistake in the current year?

What is the definition of betterments such as an addition to an existing building?

The process of allocating the cost of intangible assets to expense is called amortization.

Tomisa Company has a machine with a cost of $90,000. It has a salvage value of $11,000 and a useful life of 8 years or 75,000 units of production. It was purchased on January 1, 2011. It produced 8,500 units in 2011. To the nearest dollar, what will be the depreciation expense for 2011 using: A. straight-line depreciation? B. double-declining-balance depreciation? C. units-of-production depreciation? $__________ Straight-line depreciation $__________ Double-declining-balance depreciation $__________ Units-of-production depreciation

If an extraordinary repair is incorrectly expensed in the current period, what is the effect on the net income for the current period and for future periods?