Question 1

XYZ Co. incurred the following costs related to the office building used in operating its sports supply company:
(a)Replaced a broken window.(b)Replaced the roof that had been on the building 23 years.(c)Serviced all the air conditioners before summer started.(d)Replaced the air conditioners in the customer service areas.(e)Added a warehouse to the back of the building.(f)Repainted the interior walls.(g)Installed window shutters on all windows.​
Classify each of the costs as a capital expenditure or a revenue expenditure.

Accepted Answer

The answer of XYZ Co. incurred the following costs related...

Question 2

The acquisition costs of property, plant, and equipment should include all normal, reasonable and necessary costs to get the asset in place and ready for use.

Accepted Answer

A) True 
 B)False

Question 3

When a company discards machinery that is fully depreciated, this transaction would be recorded with the following entry

Accepted Answer

A) debit Accumulated Depreciation; credit Machinery 
B) debit Machinery; credit Accumulated Depreciation 
C) debit Cash; credit Accumulated Depreciation 
D) debit Depreciation Expense; credit Accumulated Depreciation

Question 4

A copy machine acquired on July 1 with a cost of $1,450 has an estimated useful life of 4 years. Assuming that it will have a residual value of $250, determine the depreciation for the first year by the double-declining-balance method.

Accepted Answer

The answer of A copy machine acquired on July 1...

Question 5

Classify each of the following as:
-Resurfacing a pool in an apartment building
A)Ordinary maintenance and repairs
B)Asset improvements
C)Extraordinary repairs

Accepted Answer

The answer of Classify each of the following as:
-Resurfacing a...

Question 6

The double-declining-balance method is an accelerated depreciation method.

Accepted Answer

A) True 
 B)False

Question 7

Assume the following facts related to a land purchase:

Accepted Answer

A) $178,000 
B) $180,000 
C) $193,000 
D) $196,000

Question 8

A building with an appraisal value of $154,000 is made available at an offer price of $172,000. The purchaser acquires the property for $40,000 in cash, a 90-day note payable for $45,000, and a mortgage amounting to $75,000. What is the cost basis recorded in the buyer's accounting records to recognize this purchase?

Accepted Answer

The answer of A building with an appraisal value of...

Question 9

On December 31, Strike Company sold one of its batting cages for $50,000. The equipment had an original cost of $310,000 and has accumulated depreciation of $260,000. Depreciation has been recorded up to the end of the year. What is the amount of the gain or loss on this transaction?

Accepted Answer

A) gain of $50,000 
B) loss of $50,000 
C) no gain or loss 
D) cannot be determined

Question 10

Match each account name to the financial statement section (a-i) in which it would appear.
-Depreciation Expense
A)Current Assets
B)Fixed Assets
C)Intangible Assets
D)Current Liability
E)Long-Term Liability
F)Owners' Equity
G)Revenues
H)Operating Expenses
I)Other Income/Expense

Accepted Answer

The answer of Match each account name to the financial...

Question 11

Classify each of the following costs associated with long-lived assets as one of the following:
-Cost of removing an existing building to ready land for use as a new business site
A)Land improvements
B)Buildings
C)Land
D)Machinery and equipment

Accepted Answer

The answer of Classify each of the following costs associated...

Question 12

Classify each of the following costs associated with long-lived assets as one of the following:
-Fees paid to architect to design new office building
A)Buildings
B)Machinery and equipment
C)Land
D)Land improvements

Accepted Answer

The answer of Classify each of the following costs associated...

Question 13

When a company exchanges machinery and receives a trade-in allowance greater than the book value, this transaction would be recorded with which of the following entries (assuming the exchange was considered to have commercial substance)?

Accepted Answer

A) debit Machinery and Accumulated Depreciation; credit Machinery, Cash, and Gain on Exchange of Machinery 
B) debit Machinery and Accumulated Depreciation; credit Machinery and Cash 
C) debit Cash and Machinery; credit Accumulated Depreciation 
D) debit Cash and Machinery; credit Accumulated Depreciation and Machinery

Question 14

In a lease contract, the party who legally owns the asset is the

Accepted Answer

A) lessee 
B) lessor 
C) operator 
D) banker

Question 15

Minerals removed from the earth are classified as intangible assets.

Accepted Answer

A) True 
 B)False

Question 16

Equipment acquired at a cost of $126,000 has a book value of $42,000. Journalize the disposal of the equipment under the following independent assumptions.(a)The equipment had no market value and was discarded.(b)The equipment is sold for $54,000.(c)The equipment is sold for $24,000.(d)The equipment is traded-in for a similar asset. The list price of the new equipment is $63,000. The buyer gave no cash in the exchange. The transaction lacks commercial substance.​

Accepted Answer

The answer of Equipment acquired at a cost of $126,000...

Question 17

What is the cost of the land, based upon the following data?

Accepted Answer

The answer of What is the cost of the land,...

Question 18

On July 1, Hartford Construction purchases a bulldozer for $228,000. The equipment has a 9-year life with a residual value of $16,000. Hartford uses the units-of-output method of depreciation, and the bulldozer is expected to yield 26,500 operating hours.(a) Calculate the depreciation expense per hour of operation.(b) The bulldozer is operated 1,250 hours in the first year, 2,755 hours in the second year, and 1,225 hours in the
third year of operations. Journalize the depreciation expense for each year.​

Accepted Answer

The answer of On July 1, Hartford Construction purchases a...

Question 19

The formula for depreciable cost is

Accepted Answer

A) Initial cost + Residual value 
B) Initial cost - Residual value 
C) Initial cost - Accumulated depreciation 
D) Depreciable cost = Initial cost

Question 20

Classify each of the following as:
-New landscaping
A)Ordinary maintenance and repairs
B)Asset improvements
C)Extraordinary repairs

Accepted Answer

The answer of Classify each of the following as:
-New landscaping
A)Ordinary...

Exam 9: Long-Term Assets: Fixed and Intangible

The acquisition costs of property, plant, and equipment should include all normal, reasonable and necessary costs to get the asset in place and ready for use.

When a company discards machinery that is fully depreciated, this transaction would be recorded with the following entry

A copy machine acquired on July 1 with a cost of $1,450 has an estimated useful life of 4 years. Assuming that it will have a residual value of $250, determine the depreciation for the first year by the double-declining-balance method.

Classify each of the following as: -Resurfacing a pool in an apartment building A)Ordinary maintenance and repairs B)Asset improvements C)Extraordinary repairs

The double-declining-balance method is an accelerated depreciation method.

Assume the following facts related to a land purchase:

On December 31, Strike Company sold one of its batting cages for $50,000. The equipment had an original cost of $310,000 and has accumulated depreciation of $260,000. Depreciation has been recorded up to the end of the year. What is the amount of the gain or loss on this transaction?

Match each account name to the financial statement section (a-i) in which it would appear. -Depreciation Expense A)Current Assets B)Fixed Assets C)Intangible Assets D)Current Liability E)Long-Term Liability F)Owners' Equity G)Revenues H)Operating Expenses I)Other Income/Expense

Classify each of the following costs associated with long-lived assets as one of the following: -Cost of removing an existing building to ready land for use as a new business site A)Land improvements B)Buildings C)Land D)Machinery and equipment

Classify each of the following costs associated with long-lived assets as one of the following: -Fees paid to architect to design new office building A)Buildings B)Machinery and equipment C)Land D)Land improvements

When a company exchanges machinery and receives a trade-in allowance greater than the book value, this transaction would be recorded with which of the following entries (assuming the exchange was considered to have commercial substance) ?

In a lease contract, the party who legally owns the asset is the

Minerals removed from the earth are classified as intangible assets.

What is the cost of the land, based upon the following data?

The formula for depreciable cost is

Classify each of the following as: -New landscaping A)Ordinary maintenance and repairs B)Asset improvements C)Extraordinary repairs