Question 1

The three main factors in computing depreciation are: ___________________, ___________________, __________________.

Accepted Answer

1. Cost.;

Question 2

Capital intensive companies have a relatively large amount invested in assets to generate a given level of sales.

Accepted Answer

A) True 
 B)False

Question 3

An accelerated depreciation method yields smaller depreciation expense in the early years of an asset's life and larger depreciation expense in later years.

Accepted Answer

A) True 
 B)False

Question 4

On September 30 of the current year, a company acquired and placed in service a machine at a cost of $700,000. It has been estimated that the machine has a service life of five years and a residual value of $40,000. Using the double-declining-balance method of depreciation, prepare a schedule showing depreciation amounts for the current year and the next 4 years (round answers to the nearest dollar). The company closes its books on December 31 of each year.

Accepted Answer

@#IMG-DLM& *for 3 months.
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Question 5

Residual value is:

Accepted Answer

A)  Also called residual value. 
B)  Also called scrap value. 
C)  An estimate of the asset's value at the end of its benefit period. 
D)  A factor relevant to determining depreciation. 
E)  All of these. 
A)  Also called residual value. 
B)  Also called scrap value. 
C)  An estimate of the asset's value at the end of its benefit period. 
D)  A factor relevant to determining depreciation. 
E)  All of these.

Question 6

A company purchased mining property containing 7,350,000 tons of ore for $1,837,500. In Year 1, it mined and sold 857,000 tons of ore and in Year 2, it mined and sold 943,000 tons of ore. Calculate the depletion expense for Year 1 and Year 2. What was the carrying amount of the property at the end of Year 2?

Accepted Answer

a. $1,837,500/7,350,000 tons =

Question 7

A change in an accounting estimate is:

Accepted Answer

A)  Reflected in past financial statements. 
B)  Reflected in future financial statements and also requires modification of past statements. 
C)  Reflected in current and future years' financial statements, not in prior statements. 
D)  Not allowed under current accounting rules. 
E)  Considered an error in the financial statements. 
A)  Reflected in past financial statements. 
B)  Reflected in future financial statements and also requires modification of past statements. 
C)  Reflected in current and future years' financial statements, not in prior statements. 
D)  Not allowed under current accounting rules. 
E)  Considered an error in the financial statements.

Question 8

A company purchased a tract of land for its natural resources at a cost of $1,500,000. It expects to mine 2,000,000 tons of ore from this land. The residual value of the land is expected to be $250,000. The depletion expense per ton of ore is:

Accepted Answer

A)  $0.75. 
B)  $0.625. 
C)  $0.875. 
D)  $6.00. 
E)  $8.00. 
A)  $0.75. 
B)  $0.625. 
C)  $0.875. 
D)  $6.00. 
E)  $8.00.

Question 9

Compare the different depreciation methods (straight-line, units-of-production, and double-declining-balance) with respect to the computation of depreciation per period and the total depreciation over the life of the asset.

Accepted Answer

The amount of depreciation expense per p

Question 10

Four main accounting issues for property, plant and equipment are: ________________________, ____________________________, ________________________, ____________________________.

Accepted Answer

1. Computing of the costs of property, p

Question 11

Salta Company installs a manufacturing machine in its factory at the beginning of the year at a cost of $87,000. The machine's useful life is estimated to be 5 years, or 400,000 units of product, with a $7,000 residual value. During its second year, the machine produces 84,500 units of product. Determine the machines' second year depreciation under the double-declining-balance method.

Accepted Answer

A)  $16,900. 
B)  $16,000. 
C)  $17,400. 
D)  $18,379. 
E)  $20,880. 
A)  $16,900. 
B)  $16,000. 
C)  $17,400. 
D)  $18,379. 
E)  $20,880.

Question 12

Salta Company installs a manufacturing machine in its factory at the beginning of the year at a cost of $87,000. The machine's useful life is estimated to be 5 years, or 400,000 units of product, with a $7,000 residual value. During its second year, the machine produces 84,500 units of product. Determine the machines' second year depreciation under the straight-line method.

Accepted Answer

A)  $16,900. 
B)  $16,000. 
C)  $17,400. 
D)  $18,379. 
E)  $20,880. 
A)  $16,900. 
B)  $16,000. 
C)  $17,400. 
D)  $18,379. 
E)  $20,880.

Question 13

The Weiss Company purchased a truck for $95,000 on January 2. The truck was estimated to have a $3,000 residual value and a 4 year life. The truck was depreciated using the straight-line method. During the third year, it was obvious that the truck's total useful life would be 6 years rather than 4, and the residual value at the end of the 6th year would be $1,500. Determine the depreciation expense for the truck for the 6 years of its life.

Accepted Answer

Calculations: Year 1 - Year 2 depreciati

Question 14

The total cost of an asset less its accumulated depreciation is called:

Accepted Answer

A)  Historical cost. 
B)  Carrying amount. 
C)  Present value. 
D)  Current (market) value. 
E)  Replacement cost. 
A)  Historical cost. 
B)  Carrying amount. 
C)  Present value. 
D)  Current (market) value. 
E)  Replacement cost.

Question 15

Thomas Enterprises purchased a depreciable asset on October 1, Year 1 at a cost of $100,000. The asset is expected to have a residual value of $15,000 at the end of its five-year useful life. If the asset is depreciated on the double-declining-balance method, the asset's carrying amount on December 31, Year 3 will be:

Accepted Answer

A)  $27,540 
B)  $21,600 
C)  $32,400 
D)  $18,360 
E)  $90,000 
A)  $27,540 
B)  $21,600 
C)  $32,400 
D)  $18,360 
E)  $90,000

Question 16

The going concern assumption supports the reporting of property, plant and equipment at carrying amount rather than market value.

Accepted Answer

A) True 
 B)False

Question 17

Monte Ray leases office space for $7,000 per month. On January 3, Monte Ray incurs $75,000 to improve his leased office space. These improvements are expected to yield benefits for 8 years. Ray has 6 years remaining on his lease. Compute the amount of expense that should be recorded the first year related to the improvements.

Accepted Answer

A)  $19,500. 
B)  $7,000. 
C)  $12,500. 
D)  $9,375. 
E)  $16,375. 
A)  $19,500. 
B)  $7,000. 
C)  $12,500. 
D)  $9,375. 
E)  $16,375.

Question 18

A machine was purchased for $37,000 and depreciated for five years on a straight-line basis under the assumption it would have a ten-year life and a $1,000 residual value. At the beginning of the machine's sixth year it was recognized the machine had three years of remaining life instead of five and that at the end of the remaining three years its residual value would be $1,600. What amount of depreciation should be recorded in each of the machine's remaining three years?

Accepted Answer

The answer of A machine was purchased for $37,000 and...

Question 19

A depreciation method in which an item of property, plant and equipment's depreciation expense for a period is determined by applying a constant depreciation rate to the asset's beginning-of-period carrying amount is called:

Accepted Answer

A)  Carrying amount depreciation. 
B)  Declining-balance depreciation. 
C)  Straight-line depreciation. 
D)  Units-of-production depreciation. 
E)  Equivalent depreciation. 
A)  Carrying amount depreciation. 
B)  Declining-balance depreciation. 
C)  Straight-line depreciation. 
D)  Units-of-production depreciation. 
E)  Equivalent depreciation.

Question 20

An asset can be disposed of by:

Accepted Answer

A)  Discarding it. 
B)  Selling it. 
C)  Exchanging it for another asset. 
D)  Donating it to charity. 
E)  All of these. 
A)  Discarding it. 
B)  Selling it. 
C)  Exchanging it for another asset. 
D)  Donating it to charity. 
E)  All of these.

The three main factors in computing depreciation are: _________, _, __________.

Capital intensive companies have a relatively large amount invested in assets to generate a given level of sales.

An accelerated depreciation method yields smaller depreciation expense in the early years of an asset's life and larger depreciation expense in later years.

Residual value is:

A change in an accounting estimate is:

A company purchased a tract of land for its natural resources at a cost of $1,500,000. It expects to mine 2,000,000 tons of ore from this land. The residual value of the land is expected to be $250,000. The depletion expense per ton of ore is:

Compare the different depreciation methods (straight-line, units-of-production, and double-declining-balance) with respect to the computation of depreciation per period and the total depreciation over the life of the asset.

Four main accounting issues for property, plant and equipment are: , , , ____.

The total cost of an asset less its accumulated depreciation is called:

The going concern assumption supports the reporting of property, plant and equipment at carrying amount rather than market value.

A depreciation method in which an item of property, plant and equipment's depreciation expense for a period is determined by applying a constant depreciation rate to the asset's beginning-of-period carrying amount is called:

An asset can be disposed of by:

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Cost Accounting

Process Cost Accounting

Cost Allocation and Performance Measurement

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Capital Budgeting and Managerial Decisions

Filters

Exam 10: Long-Term Assets

The three main factors in computing depreciation are: ___________________, ___________________, __________________.

Capital intensive companies have a relatively large amount invested in assets to generate a given level of sales.

An accelerated depreciation method yields smaller depreciation expense in the early years of an asset's life and larger depreciation expense in later years.

Residual value is:

A change in an accounting estimate is:

A company purchased a tract of land for its natural resources at a cost of $1,500,000. It expects to mine 2,000,000 tons of ore from this land. The residual value of the land is expected to be $250,000. The depletion expense per ton of ore is:

Compare the different depreciation methods (straight-line, units-of-production, and double-declining-balance) with respect to the computation of depreciation per period and the total depreciation over the life of the asset.

Four main accounting issues for property, plant and equipment are: ________________________, ____________________________, ________________________, ____________________________.

The total cost of an asset less its accumulated depreciation is called:

The going concern assumption supports the reporting of property, plant and equipment at carrying amount rather than market value.

A depreciation method in which an item of property, plant and equipment's depreciation expense for a period is determined by applying a constant depreciation rate to the asset's beginning-of-period carrying amount is called:

An asset can be disposed of by:

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Cost Accounting

Process Cost Accounting

Cost Allocation and Performance Measurement

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Capital Budgeting and Managerial Decisions

Filters

The three main factors in computing depreciation are: _________, _, __________.

Four main accounting issues for property, plant and equipment are: , , , ____.