Question 1

The relevant factor(s)in calculating depreciation is(are):

Accepted Answer

A)  Cost. 
B)  Residual value. 
C)  Useful life. 
D)  Both cost and useful life. 
E)  All of these answers are correct. 
A)  Cost. 
B)  Residual value. 
C)  Useful life. 
D)  Both cost and useful life. 
E)  All of these answers are correct.

Question 2

Goodwill is not depreciated or amortized but is instead decreased only if its value has been determined by management to be impaired .

Accepted Answer

A) True 
 B)False

Question 3

The three means for disposal of an asset include: ____________,____________,or ______________.

Accepted Answer

Discarding

Question 4

Property,plant and equipment can be disposed of by discarding,sale,or exchange of the asset.

Accepted Answer

A) True 
 B)False

Question 5

A new machine is expected to produce 40,000 units of product during its 5-year life.The machine cost $180,000 and is estimated to have a $20,000 residual value.
If depreciation on the machine is calculated by the double-declining-balance method,what is the depreciation for the first year?

Accepted Answer

2/5 × 100 = 40% $180

Question 6

Impairment losses must be assessed by companies on an annual basis.

Accepted Answer

A) True 
 B)False

Question 7

Twin Investments purchased land with a building for a total cost of $5,500,000 ($500,000 paid in cash and the balance on a long-term note).The appraised cost of the land and building were $3,000,000 and $2,100,000,respectively.Calculate the costs to be allocated to the land and the building and prepare the appropriate journal entry to record the acquisition.(Round all calculations to two decimals)

Accepted Answer

The answer of Twin Investments purchased land with a building...

Question 8

Legal permissions for the extraction of oil and gas from the earth are known as:

Accepted Answer

A)  Trademarks. 
B)  Patents. 
C)  Drilling rights. 
D)  Copyrights. 
E)  Leaseholds. 
A)  Trademarks. 
B)  Patents. 
C)  Drilling rights. 
D)  Copyrights. 
E)  Leaseholds.

Question 9

RoboCop Company paid $31,400 for a machine that was expected to last 5 years and have a residual value of $5,000.
During the third year of the machine's life,$3,700 was paid for replacement parts that were expected to increase the machine's productivity by 20% each year.Prepare the general journal entry to record this transaction.

Accepted Answer

The answer of RoboCop Company paid $31,400 for a machine...

Question 10

Residual value is:

Accepted Answer

A)  The same as an asset's service life. 
B)  The cost of an asset minus its accumulated depreciation. 
C)  An estimate of the asset's value at the end of its useful life. 
D)  Another name for market value. 
E)  All of these answers are correct. 
A)  The same as an asset's service life. 
B)  The cost of an asset minus its accumulated depreciation. 
C)  An estimate of the asset's value at the end of its useful life. 
D)  Another name for market value. 
E)  All of these answers are correct.

Question 11

The straight-line method and the double-declining-balance method of depreciation:

Accepted Answer

A)  Produce the same total depreciation over an asset's useful life. 
B)  Allocate an asset's cost in a systematic and rational manner. 
C)  Do not produce the same book value each year. 
D)  Are both acceptable for GAAP. 
E)  All of these answers are correct. 
A)  Produce the same total depreciation over an asset's useful life. 
B)  Allocate an asset's cost in a systematic and rational manner. 
C)  Do not produce the same book value each year. 
D)  Are both acceptable for GAAP. 
E)  All of these answers are correct.

Question 12

Depreciation should always be recorded as soon as an asset is purchased.

Accepted Answer

A) True 
 B)False

Question 13

To be charged to and reported as part of the cost of property,plant and equipment,an expenditure must be normal,reasonable,and necessary in preparing the asset for its intended use.

Accepted Answer

A) True 
 B)False

Question 14

A leasehold:

Accepted Answer

A)  Is a short-term rental agreement. 
B)  Is not an intangible asset. 
C)  Refers to the rights granted to the lessee by the lessor in a lease. 
D)  Is initially recorded as rent expense. 
E)  Is an investment. 
A)  Is a short-term rental agreement. 
B)  Is not an intangible asset. 
C)  Refers to the rights granted to the lessee by the lessor in a lease. 
D)  Is initially recorded as rent expense. 
E)  Is an investment.

Question 15

Subsequent capital expenditures:

Accepted Answer

A)  Are expenditures making a property,plant and equipment asset more efficient. 
B)  Are often called improvements. 
C)  Are added to the cost of the asset. 
D)  Often extend an asset's useful life. 
E)  All of these answers are correct. 
A)  Are expenditures making a property,plant and equipment asset more efficient. 
B)  Are often called improvements. 
C)  Are added to the cost of the asset. 
D)  Often extend an asset's useful life. 
E)  All of these answers are correct.

Question 16

On April 1,2015,Sagan Realty disposed of an automobile that had cost $50,000 on January 1,2013.The automobile had a residual value of $8,000,and a useful life of 5 years.The accounting records showed accumulated depreciation for this asset of $16,800 at December 31,2014.The asset was discarded after an accident,and $11,500 was received from an insurance claim.
Prepare the journal entry to record the disposal of the automobile.

Accepted Answer

The answer of On April 1,2015,Sagan Realty disposed of an...

Question 17

SportsWorld purchased property for a building site.The costs associated with the property were:   What portion of these costs should be allocated to the cost of the land and what portion should be allocated to the cost of the new building?

Accepted Answer

A)  $150,000 to Land; $18,800 to Building. 
B)  $190,000 to Land; $3,800 to Building. 
C)  $190,800 to Land; $3,000 to Building. 
D)  $192,800 to Land; $1,000 to Building. 
E)  $193,800 to Land; $0 to Building. 
A)  $150,000 to Land; $18,800 to Building. 
B)  $190,000 to Land; $3,800 to Building. 
C)  $190,800 to Land; $3,000 to Building. 
D)  $192,800 to Land; $1,000 to Building. 
E)  $193,800 to Land; $0 to Building.

Question 18

A machine originally had an estimated service life of 5 years,and after 3 years,it was decided that the original estimate should have been for 10 years.The remaining cost to be depreciated should be allocated over the next:

Accepted Answer

A)  2 years. 
B)  5 years. 
C)  6 years. 
D)  7 years. 
E)  10 years. 
A)  2 years. 
B)  5 years. 
C)  6 years. 
D)  7 years. 
E)  10 years.

Question 19

Matador & Company was preparing the annual financial statements and,as part of its year-end procedures,prepared the following schedule based on adjusted values at March 31,2015:   Record the entry for any impairment loss assuming that Matador & Company recorded no impairment losses in previous years.

Accepted Answer

The answer of Matador & Company was preparing the annual...

Question 20

Capital cost allowance:

Accepted Answer

A)  Is the income tax act equivalent of depreciation. 
B)  Is acceptable for financial reporting. 
C)  Is not required for tax reporting. 
D)  Is not used in Canada. 
E)  All of these answers are correct. 
A)  Is the income tax act equivalent of depreciation. 
B)  Is acceptable for financial reporting. 
C)  Is not required for tax reporting. 
D)  Is not used in Canada. 
E)  All of these answers are correct.

The relevant factor(s)in calculating depreciation is(are):

Goodwill is not depreciated or amortized but is instead decreased only if its value has been determined by management to be impaired .

The three means for disposal of an asset include: ,,or __.

Property,plant and equipment can be disposed of by discarding,sale,or exchange of the asset.

A new machine is expected to produce 40,000 units of product during its 5-year life.The machine cost $180,000 and is estimated to have a $20,000 residual value. If depreciation on the machine is calculated by the double-declining-balance method,what is the depreciation for the first year?

Impairment losses must be assessed by companies on an annual basis.

Legal permissions for the extraction of oil and gas from the earth are known as:

Residual value is:

The straight-line method and the double-declining-balance method of depreciation:

Depreciation should always be recorded as soon as an asset is purchased.

To be charged to and reported as part of the cost of property,plant and equipment,an expenditure must be normal,reasonable,and necessary in preparing the asset for its intended use.

A leasehold:

Subsequent capital expenditures:

SportsWorld purchased property for a building site.The costs associated with the property were: What portion of these costs should be allocated to the cost of the land and what portion should be allocated to the cost of the new building?

A machine originally had an estimated service life of 5 years,and after 3 years,it was decided that the original estimate should have been for 10 years.The remaining cost to be depreciated should be allocated over the next:

Matador & Company was preparing the annual financial statements and,as part of its year-end procedures,prepared the following schedule based on adjusted values at March 31,2015: Record the entry for any impairment loss assuming that Matador & Company recorded no impairment losses in previous years.

Capital cost allowance:

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

Exam 10: Property,plant and Equipment,and Intangibles

The relevant factor(s)in calculating depreciation is(are):

Goodwill is not depreciated or amortized but is instead decreased only if its value has been determined by management to be impaired .

The three means for disposal of an asset include: ____________,____________,or ______________.

Property,plant and equipment can be disposed of by discarding,sale,or exchange of the asset.

A new machine is expected to produce 40,000 units of product during its 5-year life.The machine cost $180,000 and is estimated to have a $20,000 residual value. If depreciation on the machine is calculated by the double-declining-balance method,what is the depreciation for the first year?

Impairment losses must be assessed by companies on an annual basis.

Legal permissions for the extraction of oil and gas from the earth are known as:

Residual value is:

The straight-line method and the double-declining-balance method of depreciation:

Depreciation should always be recorded as soon as an asset is purchased.

To be charged to and reported as part of the cost of property,plant and equipment,an expenditure must be normal,reasonable,and necessary in preparing the asset for its intended use.

A leasehold:

Subsequent capital expenditures:

SportsWorld purchased property for a building site.The costs associated with the property were: What portion of these costs should be allocated to the cost of the land and what portion should be allocated to the cost of the new building?

A machine originally had an estimated service life of 5 years,and after 3 years,it was decided that the original estimate should have been for 10 years.The remaining cost to be depreciated should be allocated over the next:

Matador & Company was preparing the annual financial statements and,as part of its year-end procedures,prepared the following schedule based on adjusted values at March 31,2015: Record the entry for any impairment loss assuming that Matador & Company recorded no impairment losses in previous years.

Capital cost allowance:

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

The three means for disposal of an asset include: ,,or __.