Question 1

A number of major structural repairs completed at the beginning of the current fiscal year at a cost of $1,000,000 are expected to extend the life of a building 10 years beyond the original estimate.The original cost of the building was $6,552,000,and it has been depreciated by the straight-line method for 25 years.Estimated residual value is negligible and has been ignored.The related accumulated depreciation account after the depreciation adjustment at the end of the preceding fiscal year is $4,550,000.

Accepted Answer

The answer of A number of major structural repairs completed...

Question 2

The calculation for annual depreciation using the straight-line depreciation method is

Accepted Answer

A)  initial cost / estimated useful life
B)  depreciable cost / estimated useful life
C)  depreciable cost * estimated useful life
D)  initial cost * estimated useful lifeE) B) and C)
F) B) and D)

Question 3

If a fixed asset,such as a computer,were purchased on January 1st for $3,750 with an estimated life of 3 years and a salvage or residual value of $150,the journal entry for monthly expense under straight-line depreciation is:
(Note: EOM indicates the last day of each month. )

Accepted Answer

A)  EOM Depreciation Expense 100 Accumulated Depreciation 100
B)  EOM Depreciation Expense 1,200 Accumulated Depreciation 1,200
C)  EOM Accumulated Depreciation 1,200 Depreciation Expense 1,200
D)  EOM Accumulated Depreciation 100 Depreciation Expense 100E) All of the above
F) None of the above

Question 4

The amount of depreciation expense for the first full year of use of a fixed asset costing $95,000,with an estimated residual value of $5,000 and a useful life of 5 years,is $19,000 by the straight-line method.

Accepted Answer

A) True 
 B)False

Question 5

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 DepreciationE) A) and D)
F) A) and C)

Question 6

Which of the following below is an example of a capital expenditure?

Accepted Answer

A)  cleaning the carpet in the front room
B)  tune-up for a company truck
C)  replacing an engine in a company car
D)  replacing all burned-out light bulbs in the factoryE) A) and D)
F) None of the above

Question 7

On December 31 it was estimated that goodwill of $65,000 was impaired.In addition,a patent with an estimated useful economic life of 10 years was acquired for $60,000 on July 1.

Accepted Answer

The answer of On December 31 it was estimated that...

Question 8

When a company exchanges machinery and receives a trade-in allowance less than the book value,this transaction would be recorded with the following entry:

Accepted Answer

A)  debit Machinery and Accumulated Depreciation;credit Machinery and Cash
B)  debit Cash and Machinery;credit Accumulated Depreciation
C)  debit Cash and Machinery;credit Accumulated Depreciation and Machinery
D)  debit Machinery,Accumulated Depreciation,and Loss on Disposal;credit Machinery and CashE) All of the above
F) A) and B)

Question 9

To a major resort,timeshare properties would be classified as property,plant and equipment.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is true?

Accepted Answer

A)  If using the double-declining-balance the total amount of depreciation expense during the life of the asset will be the highest.
B)  If using the units-of-production method,it is possible to depreciate more than the depreciable cost.
C)  If using the straight line method,the amount of depreciation expense during the first year is higher than that of the double-declining-balance.
D)  Regardless of the depreciation method,the amount of total depreciation expense during the life of the asset will be the same.E) A) and B)
F) A) and C)

Question 11

On December 31,Strike Company has decided to sell one of its batting cages.The initial cost of the equipment was $310,000 with an accumulated depreciation of $260,000.Depreciation has been taken up to the end of the year.The company found a company that is willing to buy the equipment for $55,000.What is the amount of the gain or loss on this transaction?

Accepted Answer

A)  Cannot be determined
B)  No gain or loss
C)  Gain of $ 5,000
D)  Gain of $55,000E) None of the above
F) All of the above

Question 12

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 costE) None of the above
F) All of the above

Question 13

An estimate of the amount which an asset can be sold at the end of its useful life is called residual value.

Accepted Answer

A) True 
 B)False

Question 14

When a company replaces a component of property,plant and equipment,which statement below does not account for one of the steps in the process?

Accepted Answer

A)  book value of the replaced component is written off to depreciation expense
B)  the asset cost of the replaced component is credited
C)  any cost to remove the old component is charged to expense
D)  the identifiable direct costs associated with the new component are capitalizedE) B) and C)
F) A) and B)

Question 15

The normal balance of the accumulated depreciation account is debit.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is included in the cost of constructing a building?

Accepted Answer

A)  insurance costs during construction
B)  cost of paving parking lot
C)  cost of repairing vandalism damage during construction
D)  cost of removing the demolished building existing on the land when it was purchasedE) A) and D)
F) B) and C)

Question 17

When cities give land or buildings to a company to locate in the community,no entry is made since there is no cost to the company.

Accepted Answer

A) True 
 B)False

Question 18

Prepare the following journal entries and calculations:

Accepted Answer

The answer of Prepare the following journal entries and calculations:
...

Question 19

The exclusive right to use a certain name or symbol is called a

Accepted Answer

A)  goodwill
B)  patent
C)  trademark
D)  copyrightE) All of the above
F) C) and D)

Question 20

Which of the following should be included in the acquisition cost of a piece of equipment?

Accepted Answer

A)  transportation costs
B)  installation costs
C)  testing costs prior to placing the equipment into production
D)  all are correctE) None of the above
F) A) and B)

Exam 9: Fixed Assets and Intangible Assets

Correct Answer
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An estimate of the amount which an asset can be sold at the end of its useful life is called residual value.

Correct Answer
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The calculation for annual depreciation using the straight-line depreciation method is

Correct Answer
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If a fixed asset,such as a computer,were purchased on January 1st for $3,750 with an estimated life of 3 years and a salvage or residual value of $150,the journal entry for monthly expense under straight-line depreciation is: (Note: EOM indicates the last day of each month. )

Correct Answer
verified

To a major resort,timeshare properties would be classified as property,plant and equipment.

Correct Answer
verified

Which of the following is true?

Correct Answer
verified

Which of the following below is an example of a capital expenditure?

Correct Answer
verified

When a company replaces a component of property,plant and equipment,which statement below does not account for one of the steps in the process?

Correct Answer
verified

When a company exchanges machinery and receives a trade-in allowance less than the book value,this transaction would be recorded with the following entry:

Correct Answer
verified

Correct Answer
verified

Prepare the following journal entries and calculations:

Correct Answer
verified

Which of the following is included in the cost of constructing a building?

Correct Answer
verified

On December 31 it was estimated that goodwill of $65,000 was impaired.In addition,a patent with an estimated useful economic life of 10 years was acquired for $60,000 on July 1.

Correct Answer
verified

The exclusive right to use a certain name or symbol is called a

Correct Answer
verified

The normal balance of the accumulated depreciation account is debit.

Correct Answer
verified

The formula for depreciable cost is

Correct Answer
verified

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

Correct Answer
verified

When cities give land or buildings to a company to locate in the community,no entry is made since there is no cost to the company.

Correct Answer
verified

Which of the following should be included in the acquisition cost of a piece of equipment?

Correct Answer
verified

The amount of depreciation expense for the first full year of use of a fixed asset costing $95,000,with an estimated residual value of $5,000 and a useful life of 5 years,is $19,000 by the straight-line method.

Correct Answer
verified

Exam 9: Fixed Assets and Intangible Assets

Correct AnswerverifiedShow Answer

An estimate of the amount which an asset can be sold at the end of its useful life is called residual value.

Correct AnswerverifiedShow Answer

The calculation for annual depreciation using the straight-line depreciation method is

Correct AnswerverifiedShow Answer

If a fixed asset,such as a computer,were purchased on January 1st for $3,750 with an estimated life of 3 years and a salvage or residual value of $150,the journal entry for monthly expense under straight-line depreciation is: (Note: EOM indicates the last day of each month. )

Correct AnswerverifiedShow Answer

To a major resort,timeshare properties would be classified as property,plant and equipment.

Correct AnswerverifiedShow Answer

Which of the following is true?

Correct AnswerverifiedShow Answer

Which of the following below is an example of a capital expenditure?

Correct AnswerverifiedShow Answer

When a company replaces a component of property,plant and equipment,which statement below does not account for one of the steps in the process?

Correct AnswerverifiedShow Answer

When a company exchanges machinery and receives a trade-in allowance less than the book value,this transaction would be recorded with the following entry:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Prepare the following journal entries and calculations:

Correct AnswerverifiedShow Answer

Which of the following is included in the cost of constructing a building?

Correct AnswerverifiedShow Answer

On December 31 it was estimated that goodwill of $65,000 was impaired.In addition,a patent with an estimated useful economic life of 10 years was acquired for $60,000 on July 1.

Correct AnswerverifiedShow Answer

The exclusive right to use a certain name or symbol is called a

Correct AnswerverifiedShow Answer

The normal balance of the accumulated depreciation account is debit.

Correct AnswerverifiedShow Answer

The formula for depreciable cost is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

When cities give land or buildings to a company to locate in the community,no entry is made since there is no cost to the company.

Correct AnswerverifiedShow Answer

Which of the following should be included in the acquisition cost of a piece of equipment?

Correct AnswerverifiedShow Answer

The amount of depreciation expense for the first full year of use of a fixed asset costing $95,000,with an estimated residual value of $5,000 and a useful life of 5 years,is $19,000 by the straight-line method.

Correct AnswerverifiedShow Answer

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