Exam 10: Long Term Assets

All of the following are needed for the computation of depreciation except

A contract limiting the rights of others to go into business in a specific industry or line of business for a specified period is called a

When disposing of equipment,Accumulated Depreciation is debited for the existing accumulated depreciation on the equipment.

The term used to describe the allocation of the cost of an intangible asset to the periods it benefits is

On January 1,2009,Town Spa Pizza purchased for $16,000 a delivery truck that will be driven an estimated 100,000 miles.The truck has an estimated useful life of ten years and an estimated residual value of $5,000.Calculate the following amounts: (a)depreciation expense for 2013,under the production method (assume that 17,000 miles were driven that year); (b)the accumulated depreciation after the truck has been used for five and one-half years,under the straight-line method; and (c)depreciation expense for 2011,under the double-declining-balance method.(Show your work.)

A piece of equipment is purchased for $70,000.It has a five-year life and a $10,000 residual value.Under the straight-line method,what is the asset's carrying value after three years?

Prior to the disposal of an asset,depreciation should be updated and recorded.

Underestimating the number of tons of a mineral that can be mined over a mineral deposit's life will not result in

An on-site building with a twelve-year life will be abandoned after the associated timber tract with a nine-year life is depleted.The building should be depreciated over twelve years.

Match each definition with the correct term below. -Goodwill A)Enlargements of a plant's physical layout. B)A right to occupy land or buildings under a long-term contract. C)The portion of an asset's acquisition cost that a company expects to recover when it disposes of the asset. D)The proportional allocation of the cost of a natural resource to the units extracted. E)A registered symbol that can be used only by its owner to identify a product or service. F)The excess of the amount paid for a business over the fair market value of the business's net assets. G)The periodic allocation of the cost of an intangible long-lived asset to the periods it benefits. H)Improvements to a plant asset that do not add to the plant's physical layout. I)The total number of service units expected from a long-term asset. J)The periodic allocation of the cost of a tangible long-lived asset over its estimated useful life.

If an asset costs $70,000,has a residual value of $6,000,and has a useful life of five years,the entry to record depreciation in the second year,using the double-declining-balance method,is:

Noncompete covenants should be amortized over the specified life of the contract.

The depreciable cost of an asset is

A symbol or name used to identify a product or service is called

Cocke Mining Company purchases a gravel pit for $5,000,000.It estimates that 10,000,000 tons of gravel can be extracted over the pit's useful life.If 930,000 tons are extracted and sold during the first year,the entry to record the depletion expense is:

When depreciation rates are revised,only the remaining years of the asset's life are affected by the new computation.

It is necessary to distinguish between capital and revenue expenditures because of which of the following accounting rules or principles?

Free cash flow is a good measure of a company's ability to finance long-term assets.

A building was purchased for $500,000.It has accumulated depreciation of $80,000 and had a residual value of $100,000.Assuming the use of straight-line depreciation,its estimated useful life must have been

Equipment was purchased for $78,000.It had an estimated residual value of $12,000 and has a current carrying value of $50,000.Its depreciable cost must have been