Exam 18: Property, Plant, and Equipment

Equipment that cost $20,000 was sold for $12,000 cash. Accumulated depreciation on the asset was $14,000. The entry to record the sale includes a credit to the Equipment account for

Which method of depreciation is seldom, if ever, used for financial accounting purposes?

Using the information shown, calculate the depreciation for 2013, 2014, and 2015 under the double-declining-balance method (DDB).

When computing depreciation, the salvage value should be ignored if a company uses

The adjusting entry to record depletion for the period includes a credit to the Depletion Expense account.

On January 3, 2013, the Soloman Toy Company purchased a machine for $24,000. The machine is expected to produce 200,000 units during its useful life of five years and have a salvage value of $2,000 at the end of that period. The machine produced 41,000 units in 2013, 38,000 units in 2014, and 40,000 units in 2015. Prepare a schedule showing the annual depreciation for 2013, 2014, and 2015 under the straight-line method and the units-of-output method.

The cost of land is not depreciated.

JRB Preschool purchased a van used in the business three years ago for $36,500. The accumulated depreciation account related to the equipment asset account had a balance of $18,000. The equipment had an estimated salvage (residual) value of $6,500 and had an estimated life of five years. A full year's depreciation was taken the first year. JRB uses the straight-line depreciation method. All depreciation is usually recorded at yearend. The company sold the equipment in exchange for a promissory note on July 1 of the current year for $12,000. Record the appropriate entries necessary.

A firm purchases an asset for $50,000 and estimates that it will have a useful life of five years and a salvage value of $5,000. Under the straight-line method, the balance in the accumulated deprecation account, after the second year, will be

A firm purchases an asset for $50,000 and estimates that it will have a useful life of five years and a salvage value of $5,000. Under the double-declining-balance method, the depreciation expense for the first year of the asset's useful life is

Trade-ins are treated as sales of assets for accounting purposes. Explain the difference in treatment when the trade-in of an asset results in a gain and the treatment when the trade-in of an asset results in a loss.

If the property used in a business has physical substance and is not real estate it is _____________ property.

C C Coal Company purchased the coal rights in an area for $4,050,000. They estimated that the area contained 9,000,000 tons of coal. The first year of operations in the area yielded 110,000 tons of coal. What is the depletion cost per ton of coal? What is the depletion expense for this first year?

Patents, trademarks, and copyrights are examples of ____________________ assets.

When an asset is sold, the first thing an accountant must do is record the depreciation to the date of sale.

A company uses the units-of-output method of computing depreciation on its fleet of cars. A car that costs $26,000 is expected to have a useful life of 75,000 miles and an expected salvage value of $2,000 at the end of its useful life. The rate for each mile is ___________________. (26000 - 2000)/75000

A. Using the information shown, record the journal entry for the sale of the facility for $26,450. Assume that the sale took place on July 1, 2013, six months after the facility was written down. Record the journal entry made to update the books prior to the sale. B. In addition, assume that the new technology that made the Mixer owned by the company has been determined to environmental unsound and has been called off the market. The estimated revenues generated by the Mixer are recalculated to a total of $150,000 over the next four years. Explain what Ryadom Industries must do regarding its asset accounts regarding this turn of events.

The Modified Accelerated Cost Recovery System (MACRS) is required for ______________ income tax purposes.

The allocation of the costs of natural resources, such as minerals, to the units produced is referred to as

The steps in the process of determining an impairment loss in their proper order are