Exam 10: Long Term Assets

Depreciation should not be recorded for a depreciable asset that is increasing in value.

The cost of tearing down a building on land just purchased should be

Intangible assets are subject to a process called depletion.

Equipment is purchased for $120,000.It has a five-year useful life and a $20,000 residual value.Under the double-declining-balance method,what is the depreciation expense for year 3?

Guilford Company's air-conditioning system has just completed the eighth year of an estimated ten-year life.The system cost $30,000 and now has accumulated depreciation of $24,000.At the beginning of the ninth year,the company expects to spend $8,000 on a complete renovation of the system and expects the total life of the system to be fifteen years.Neither the capacity of the system nor the residual value was increased.The company uses the straight-line method to determine depreciation.Determine the following: (a)the account debited for the cost of renovation,(b)the carrying value of the system after renovation,and (c)the depreciation expense for the ninth year.

A positive net present value of a long-term asset under consideration for purchase indicates that the asset should not be purchased.

Which of the following statements is true about the full-costing method?

An asset that cost $24,000 and has accumulated depreciation of $18,000 is sold for $5,200.The entry to record the sale is:

A building was purchased for $460,000.It currently 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

Typically,depreciation calculations are rounded to the nearest whole month.

The amount of depletion of a coal mine in a year may differ from the depletion expense in the same year because

Estimated useful life and legal life are synonymous terms when dealing with intangible assets.

A natural resource is subject to a process called depletion.

Computation of a partial year's depreciation is often required for the proper determination of net income.

The Accumulated Depreciation account typically is debited when a(n)

The symbol used to identify the publisher of your accounting textbook is an example of a

Which of the following is not a characteristic of an ordinary repair?

If a capital expenditure is incorrectly recorded on a company's books as a revenue expenditure,which of the following statements will be true?

Which of the following methods ignores residual value initially but eventually considers it in the calculation of depreciation?

On January 1,2009,Tipton's Pizza purchased for $48,000 a delivery truck that will be driven an estimated 120,000 miles.The truck has an estimated useful life of eight years and an estimated residual value of $12,000.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.