Question 1

On the balance sheet,it is not necessary to report both the cost and the accumulated depreciation of an asset.

Accepted Answer

A) True 
 B)False

Question 2

Factor(s)that might limit an intangible asset's useful life include:

Accepted Answer

A)  Legal. 
B)  Regulatory. 
C)  Contractual. 
D)  Economic. 
E)  All of the above answers are correct. 
A)  Legal. 
B)  Regulatory. 
C)  Contractual. 
D)  Economic. 
E)  All of the above answers are correct.

Question 3

_____________ is the Income Tax Act equivalent for depreciation.

Accepted Answer

Capital Co

Question 4

Mandy Manufacturing purchased a machine on August 1,2014,and it was installed and ready to run on January 1,2015.The following costs were incurred in the purchase and installation of the machine.   Calculate the depreciable cost of the machine.

Accepted Answer

@#IMG-DLM& NOTE ALL

Question 5

SportsWorld purchased a machine for $190,000.The machine has a useful life of 8 years and a residual value of $10,000.SportsWorld estimates that the machine could produce 750,000 units of product over its useful life.In the first year,95,000 units were produced.In the second year,production increased to 111,000 units.Using the units-of-production method,what is the amount of depreciation that should be recorded for the second year?

Accepted Answer

A)  $26,640. 
B)  $22,800. 
C)  $28,000 
D)  $36,000. 
E)  $49,440. 
A)  $26,640. 
B)  $22,800. 
C)  $28,000 
D)  $36,000. 
E)  $49,440.

Question 6

Five years ago,Sanford and Sons purchased equipment for $108,000 which had an estimated useful life of 10 years with an expected residual value of $15,000.At the end of five years,the equipment's accumulated depreciation is $46,500.Prepare the journal entry to record the sale of the equipment at the end of the fifth year for $45,000 cash.

Accepted Answer

The answer of Five years ago,Sanford and Sons purchased equipment...

Question 7

Robertson Company exchanged a used machine for a new machine.The old machine cost $80,000,and the new one had a cash price of $95,000.Robertson had recorded a total of $75,000 depreciation on the old machine and was allowed a $4,500 trade-in allowance.This transaction has commercial substance.What gain or loss should be recorded on the exchange?

Accepted Answer

The answer of Robertson Company exchanged a used machine for...

Question 8

Land improvements are:

Accepted Answer

A)  Assets that increase the usefulness of land,but that have a limited useful life. 
B)  Assets that increase the usefulness of land,and like land are not depreciated. 
C)  Included in the land account. 
D)  Expensed in the period incurred. 
E)  Never depreciated. 
A)  Assets that increase the usefulness of land,but that have a limited useful life. 
B)  Assets that increase the usefulness of land,and like land are not depreciated. 
C)  Included in the land account. 
D)  Expensed in the period incurred. 
E)  Never depreciated.

Question 9

The cost of an asset includes all normal and reasonable expenditures necessary to get it in place and ready for its intended use.

Accepted Answer

A) True 
 B)False

Question 10

Twilight Manufacturing's property,plant and equipment records reveal the following information:   Calculate the depreciation expense for each equipment item for the year ended December 31,2014,using the nearest whole month method.

Accepted Answer

The answer of Twilight Manufacturing's property,plant and equipment records reveal...

Question 11

If a machine is damaged during unpacking,the repairs are added to its cost.

Accepted Answer

A) True 
 B)False

Question 12

Property,plant and equipment are assets held for sale.

Accepted Answer

A) True 
 B)False

Question 13

On April 1,Fog Company traded an old machine that originally cost $32,000 and had been depreciated $24,000 for a new machine that had a cash price of $40,000.
Assuming that this transaction has commercial substance,
(1)Prepare the journal entry to record the exchange under the assumption that a $5,000 trade-in allowance was received and the balance was paid in cash.
(2)Prepare the journal entry to record the exchange under the assumption that instead of a $5,000 trade-in allowance,a $12,500 trade-in allowance was received and the balance was paid in cash.

Accepted Answer

The answer of On April 1,Fog Company traded an old...

Question 14

A machine that cost $40,000 and had accumulated depreciation of $30,000 was traded in on a new machine,which had an estimated 20-year life and a cash price of $50,000.If a $7,000 trade-in allowance was received on the old machine,the new machine should be valued at:

Accepted Answer

A)  $10,000. 
B)  $40,000. 
C)  $47,000. 
D)  $50,000. 
E)  $53,000. 
A)  $10,000. 
B)  $40,000. 
C)  $47,000. 
D)  $50,000. 
E)  $53,000.

Question 15

On October 1,2014,Fisherman Company purchased a light truck,at a cost of $62,000.The truck is expected to last six years and have a residual value of $5,200.Fisherman Company uses the calendar year as their fiscal year,and the nearest whole month method for depreciation.
(a)What is the depreciation expense for 2014,assuming the straight-line method is used?
(b)What is the depreciation expense for 2014 and 2015,assuming the double-declining-balance method is used (round double declining rate to 4 decimals)?

Accepted Answer

The answer of On October 1,2014,Fisherman Company purchased a light...

Question 16

On April 3,2015,Rainbow Studios purchased a patent for $56,000.Its remaining legal life is 7 years and Rainbow Studios estimates that the patent will be useful for another 4 years.The correct adjusting entry to record amortization of the patent on December 31,2015 is:

Accepted Answer

A) 
  
B) 
  
C) 
  
D) 
  
A) 
  
B) 
  
C) 
  
D)

Question 17

On January 1,2015,Bailey Company purchased a machine for $106,000 that was expected to last five years and has a residual value of $6,000.At the beginning of 2018,Bailey decided that the machine's estimated useful life should be revised to a total of 6 years instead of 5.Also,the residual value was now estimated to be $5,500.Straight-line depreciation was used.Calculate the depreciation expense for 2018.

Accepted Answer

($106,000 - $6,000)/5 = $20,00

Question 18

SportsWorld purchased store equipment for $65,000.The equipment has an estimated residual value of $6,000,with an estimated useful life of 10 years.The annual depreciation using the straight-line method will be $3,900 per year.

Accepted Answer

A) True 
 B)False

Question 19

Obsolescence:

Accepted Answer

A)  Occurs when an asset is at the end of its useful life. 
B)  Refers to a condition where a property,plant and equipment asset is no longer useful in producing goods and services. 
C)  Refers to a condition where the capacity of a property,plant and equipment asset is too small to meet the company's productive demands. 
D)  Is the same as inadequacy. 
E)  None of these answers is correct. 
A)  Occurs when an asset is at the end of its useful life. 
B)  Refers to a condition where a property,plant and equipment asset is no longer useful in producing goods and services. 
C)  Refers to a condition where the capacity of a property,plant and equipment asset is too small to meet the company's productive demands. 
D)  Is the same as inadequacy. 
E)  None of these answers is correct.

Question 20

The formula for calculating straight-line depreciation is:

Accepted Answer

A)  Depreciable cost divided by the useful life in years. 
B)  Cost plus residual value divided by the useful life in years. 
C)  Depreciable cost divided by useful life in units. 
D)  Cost divided by useful life in years. 
E)  Cost divided by useful life in units. 
A)  Depreciable cost divided by the useful life in years. 
B)  Cost plus residual value divided by the useful life in years. 
C)  Depreciable cost divided by useful life in units. 
D)  Cost divided by useful life in years. 
E)  Cost divided by useful life in units.

On the balance sheet,it is not necessary to report both the cost and the accumulated depreciation of an asset.

Factor(s)that might limit an intangible asset's useful life include:

_____________ is the Income Tax Act equivalent for depreciation.

Mandy Manufacturing purchased a machine on August 1,2014,and it was installed and ready to run on January 1,2015.The following costs were incurred in the purchase and installation of the machine. Calculate the depreciable cost of the machine.

Land improvements are:

The cost of an asset includes all normal and reasonable expenditures necessary to get it in place and ready for its intended use.

Twilight Manufacturing's property,plant and equipment records reveal the following information: Calculate the depreciation expense for each equipment item for the year ended December 31,2014,using the nearest whole month method.

If a machine is damaged during unpacking,the repairs are added to its cost.

Property,plant and equipment are assets held for sale.

A machine that cost $40,000 and had accumulated depreciation of $30,000 was traded in on a new machine,which had an estimated 20-year life and a cash price of $50,000.If a $7,000 trade-in allowance was received on the old machine,the new machine should be valued at:

On April 3,2015,Rainbow Studios purchased a patent for $56,000.Its remaining legal life is 7 years and Rainbow Studios estimates that the patent will be useful for another 4 years.The correct adjusting entry to record amortization of the patent on December 31,2015 is:

SportsWorld purchased store equipment for $65,000.The equipment has an estimated residual value of $6,000,with an estimated useful life of 10 years.The annual depreciation using the straight-line method will be $3,900 per year.

Obsolescence:

The formula for calculating straight-line depreciation is:

Current Liabilities

Partnerships

Organization and Operation of Corporations

Corporate Reporting: Income,earnings Per Share,and Retained Earnings

Bonds and Long-Term Notes Payable

Accounting for Debt and Share Investments

Reporting and Analyzing Cash Flows

Analyzing Financial Statements

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Exam 10: Property,plant and Equipment,and Intangibles

On the balance sheet,it is not necessary to report both the cost and the accumulated depreciation of an asset.

Factor(s)that might limit an intangible asset's useful life include:

_____________ is the Income Tax Act equivalent for depreciation.

Mandy Manufacturing purchased a machine on August 1,2014,and it was installed and ready to run on January 1,2015.The following costs were incurred in the purchase and installation of the machine. Calculate the depreciable cost of the machine.

Land improvements are:

The cost of an asset includes all normal and reasonable expenditures necessary to get it in place and ready for its intended use.

Twilight Manufacturing's property,plant and equipment records reveal the following information: Calculate the depreciation expense for each equipment item for the year ended December 31,2014,using the nearest whole month method.

If a machine is damaged during unpacking,the repairs are added to its cost.

Property,plant and equipment are assets held for sale.

A machine that cost $40,000 and had accumulated depreciation of $30,000 was traded in on a new machine,which had an estimated 20-year life and a cash price of $50,000.If a $7,000 trade-in allowance was received on the old machine,the new machine should be valued at:

On April 3,2015,Rainbow Studios purchased a patent for $56,000.Its remaining legal life is 7 years and Rainbow Studios estimates that the patent will be useful for another 4 years.The correct adjusting entry to record amortization of the patent on December 31,2015 is:

SportsWorld purchased store equipment for $65,000.The equipment has an estimated residual value of $6,000,with an estimated useful life of 10 years.The annual depreciation using the straight-line method will be $3,900 per year.

Obsolescence:

The formula for calculating straight-line depreciation is:

Current Liabilities

Partnerships

Organization and Operation of Corporations

Corporate Reporting: Income,earnings Per Share,and Retained Earnings

Bonds and Long-Term Notes Payable

Accounting for Debt and Share Investments

Reporting and Analyzing Cash Flows

Analyzing Financial Statements

Filters