Exam 8: Long-Term Assets

Increases in the value of a security while the company still owns it are considered realized gains.

What type of account is Accumulated Depletion?

Subtracting accumulated depletion from the asset account "coal mine" would yield the __________.

If an asset is discarded and scrapped for $0 when it has a net book value of $2,000, what is the gain or loss from this disposal?

What would a manufacturer obtain to identify its merchandise and to bar other manufacturers from using the same identification?

When the natural resource gold is sold, what accounts are affected?

Depreciation is a process of valuation of an asset.

Ordinary repairs are also called revenue expenditures because the expense is matched against the revenues for the period.

Patents to produce and sell inventions are conveyed by the federal government for a period of __________.

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 percentage of purchase price should item C be recorded? At what amount should item C be recorded at (rounded to the nearest dollar)?

Equipment that cost $50,000 and had accumulated depreciation of $43,000 was traded in for new equipment with a fair market value of $62,000. The old equipment and $55,000 in cash were given up for the new equipment. What is the journal entry to record this exchange of assets?

Under IFRS, a company can choose to record their Property, Plant, and Equipment at fair value. What method is this called?

A truck was purchased on January 2 at a cost of $60,000. It is expected to be used for 5 years and to have a residual value of $5,000 after 120,000 miles of service. The truck was driven for 23,000 miles the first year and 25,000 miles the second year. Calculate the depreciation expense to the nearest dollar for the first and second years.

A company has installed a piece of machinery for a total of $76,000. In its third month of operation, repairs of $1,300 had to be made on the machine. The $1,300 would be allocated to which account?

What needs to be recorded before the disposal of the asset can be recorded?

The cost of long-term assets must be allocated to an expense as the asset is used up.

What is the method best suited for depreciating items such as copy machines and vehicles?

A company purchased a computer system on March 1, 2012. Its cost was $35,000 and it had an estimated residual value of $5,000. It was expected to have a useful life for four years. To the nearest dollar, the depreciation for 2012 using straight-line depreciation will be:

Which of the following would be considered part of land improvements?

Assume fair value of a vehicle is $16,000, value in use is $16,600, and carrying value $17,700. Is the asset impaired under IFRS? If so, what is the journal entry?