Question 1

A new machine is expected to produce 40,000 units of product during its 5-year life.The machine cost $38,000 and is estimated to have a $6,000 residual value.
What is the first year's depreciation on the machine calculated by the straight-line method?

Accepted Answer

The answer of A new machine is expected to produce...

Question 2

An asset that cost $5,000 has a current book value of $2,000.A revision of the useful life of the asset estimates the asset has a remaining useful life of four years and will have a residual value of $400.Using the straight-line method,the revised depreciation will be $500 per year.

Accepted Answer

A) True 
 B)False

Question 3

The impairment of goodwill appears directly on the statement of changes in equity and not on the income statement.

Accepted Answer

A) True 
 B)False

Question 4

Inadequacy refers to the condition where the capacity of a property,plant and equipment item is too small to meet the company's productive demands.

Accepted Answer

A) True 
 B)False

Question 5

The first step in accounting for the disposal of property,plant and equipment is calculating the gain or loss on disposal.

Accepted Answer

A) True 
 B)False

Exam 10: Property,plant and Equipment,and Intangibles

A new machine is expected to produce 40,000 units of product during its 5-year life.The machine cost $38,000 and is estimated to have a $6,000 residual value. What is the first year's depreciation on the machine calculated by the straight-line method?

An asset that cost $5,000 has a current book value of $2,000.A revision of the useful life of the asset estimates the asset has a remaining useful life of four years and will have a residual value of $400.Using the straight-line method,the revised depreciation will be $500 per year.

The impairment of goodwill appears directly on the statement of changes in equity and not on the income statement.

Inadequacy refers to the condition where the capacity of a property,plant and equipment item is too small to meet the company's productive demands.

The first step in accounting for the disposal of property,plant and equipment is calculating the gain or loss on disposal.