Exam 10: Long -Term Assets

Which of the following is not considered an intangible asset?

A debit to Accumulated Depreciation will increase the carrying value of an asset.

A truck that cost $24,000 and on which $18,000 of accumulated depreciation has been recorded was disposed of on January 1.Assume that the truck was disposed of for $4,000 cash.The entry to record this event would include

The production method is an accelerated method of depreciation.

Preston Corporation purchased a truck for $40,000.The company expected the truck to last four years or 100,000 miles,with an estimated residual value of $4,000 at the end of that time.During the second year,the truck was driven 27,500 miles.Compute the depreciation for the second year under each of the following methods: (a)straight-line, (b)production,and (c)double-declining-balance.(Show your work. )

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

Land and a building on the land are purchased for $310,000.The appraised values of the land and building are $66,000 and $264,000,respectively.The cost allocated to the building should be

Driveways and parking lots are properly included in the Land account because they are not subject to depreciation.

Depreciation for tax purposes is identical to depreciation for financial reporting purposes.

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

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

Depreciation is a process of allocation,not of valuation.

Equipment is purchased for $40,000.It has an eight-year useful life and a $21,375 residual value.Under the double-declining-balance method,what is the depreciation expense for year 3?

What commitments must a company account for in determining its free cash flow?

A truck is purchased for $70,000.It has a five-year life and a $10,000 residual value.Under the double-declining-balance method,what is the accumulated depreciation after two years?

When an extraordinary repair has been made to equipment,which of the following accounts is debited?

When the trade-in allowance exceeds the carrying value of an asset exchanged,a gain is realized.

Free cash flow is

Oswald purchased land for $48,000 and paid an additional $2,000 to install parking space.The entry to record the payment for the parking space is:

Davida's Delivery Service purchased a delivery van for $30,000.The van had an estimated useful life of six years and an estimated residual value of $6,000.After four years of use,the total estimated useful life is revised to seven years.Assuming straight-line depreciation,depreciation expense in year 5 would be (amounts rounded)