Exam 8: Long-Term and Other Assets

GAAP does not allow property, plant, and equipment to be shown at net book value on the Balance Sheet.

A company purchased a van at a cost of $42,000 and expects its salvage value to be $6,000 after 100,000 miles of service. Using the units-of-production method, what is the first year's depreciation if the van is driven 30,000 miles? (Round any intermediary calculations to the nearest cent and your final answer to the nearest dollar.)

Double-declining balance is an accelerated method of calculating depreciation where salvage value is NOT part of the initial computation.

It is determined that a computer's depreciation expense for the year is $3,500. The journal entry to record this will be:

The matching principle dictates whether the cost of a repair should be expensed or depreciated.

A truck costing $56,000 has accumulated depreciation of $47,000. The truck is sold for $8,500. The journal entry to record this transaction is to:

Long-term assets usually begin with the listing of natural resources first.

Sydney's Siding made a basket purchase involving four assets. Their market values were A: $41,000; B: $40,000; C: $45,000; and D: $54,000. The price Sydney's paid for the four assets was $170,000. What percentage of the $170,000 price would be allocated to asset C to the nearest one-tenth of a percent? (Round any intermediary calculations to the nearest cent and your final answer to the nearest dollar.)

Equipment costing $120,000 has accumulated depreciation of $97,000. The equipment is a trade-in for new equipment costing $190,000. If the trade-in value received for the old equipment is $36,000, the journal entry to record this transaction is to:

Charbucks has net income of $50,000, sales of $250,000, beginning fixed assets of $150,000 and ending fixed assets of $200,000. The fixed asset turnover is (rounded)1.4.

For which kind of marketable securities are any unrealized gains and losses shown on the income statement?

Which of the following would NOT be considered a fixed asset?

Available-for-sale securities are reported at their current market value, and any increases or decreases in market value are reported as part of net income.

If an asset generates revenue evenly over time, the depreciation method best suited for this asset would be the:

Instead of using an accumulated amortization account similar to accumulated depreciation, the expense of amortization is directly credited to the intangible asset itself.

The choice of depreciation method depends on the cost of the asset and its' expected useful life.

If an exchange of assets lacks commercial substance, then no gain or loss on the exchange is recognized.

A manufacturer may identify its product with a unique symbol and prevent other manufacturers from using the same symbol by obtaining a:

After an asset is fully depreciated, the asset:

Wolfe Company purchased a truck for $62,000, with an estimated useful life of 8 years and a salvage value of $10,000. The company uses the double-declining-balance method of depreciation; however, after year 3 they switch to the straight-line method. There is no change to the estimated useful life or salvage value. What is the accumulated depreciation balance at the end of year 5 (round to the nearest dollar)? (Round any intermediary calculations to the nearest cent and your final answer to the nearest dollar.)