FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 11: Property, plant, and Equipment and Intangible Assets: Utilization and Impairment

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 61

Multiple Choice

Review LaterAdd Note

Review Later

Belotti would record depletion in 2017 of:

A) $54,667.
B) $65,600.
C) $52,480.
D) $55,760.

E) C) and D)
F) B) and D)

Correct Answer

verified

Show Answer

Question 62

Multiple Choice

Review LaterAdd Note

Review Later

In testing for recoverability of property,plant,and equipment,an impairment loss is required if the:

A) Asset's book value exceeds the undiscounted sum of expected future cash flows.
B) Undiscounted sum of its expected future cash flows exceeds the asset's book value.
C) Present value of expected future cash flows exceeds its book value.
D) All of these answer choices are incorrect.

E) C) and D)
F) A) and B)

Correct Answer

verified

Show Answer

Question 63

Multiple Choice

Review LaterAdd Note

Assuming an asset is used evenly over a four-year service life,which method of depreciation will always result in the largest amount of depreciation in the first year?

The amount of impairment loss is the excess of book value over:

Meca Concrete purchased a mixer on January 1,2014,at a cost of $45,000.Straight-line depreciation for 2014 and 2015 was based on an estimated eight-year life and $3,000 estimated residual value.In 2016,Meca revised its estimate and now believes the mixer will have a total service life of only six years,and that the residual value will be only $2,000. Required: Compute depreciation for 2016 and 2017.

According to International Financial Reporting Standards (IFRS) ,the impairment loss for property,plant,and equipment is the difference between book value and:

Eckland Manufacturing Co.purchased equipment on January 1,2014,at a cost of $90,000.Straight-line depreciation for 2014 and 2015 was based on an estimated eight-year life and $2,000 estimated residual value.In 2016,Eckland revised its estimate and now believes the equipment will have a total service life of only six years,while the residual value remains the same. Required: Compute depreciation for 2016 and 2017.

Listed below are five terms followed by a list of phrases that describe or characterize each of the terms.Match each phrase with the number for the correct term.

Depreciation (to the nearest dollar) for 2017,using sum-of-the-years' digits,would be:

Using the double-declining balance method,depreciation for 2017 and book value at December 31,2017,would be:

Robertson Inc.prepares its financial statements according to International Financial Reporting Standards (IFRS) .At the end of its 2016 fiscal year,the company chooses to revalue its equipment.The equipment cost $540,000,had accumulated depreciation of $240,000 at the end of the year after recording annual depreciation,and had a fair value of $330,000.After the revaluation,the accumulated depreciation account will have a balance of:

In January 2016,Vega Corporation purchased a patent at a cost of $200,000.Legal and filing fees of $50,000 were paid to acquire the patent.The company estimated a 10-year useful life for the patent and uses the straight-line amortization method for all intangible assets.In January,2019,Vega spent $40,000 in legal fees for an unsuccessful defense of the patent and the patent is no longer usable.The amount charged to income (expense and loss) in 2019 related to the patent should be:

Use the following to answer questions In 2015,Dooling Corporation acquired Oxford Inc.for $250 million,of which $50 million was attributed to goodwill.At the end of 2016,Dooling's accountants derive the following information for a required goodwill impairment test: -Required: Determine the amount,if any,of the goodwill impairment loss that Dooling must recognize on these assets.

Accounting for impairment losses:

Asset C3PO has a depreciable base of $16.5 million and a service life of 10 years.What would the accumulated depreciation be at the end of year five under the sum-of-the-years' digits method?

Rice Industries owns a manufacturing plant in a foreign country.Political unrest in the country indicates that Rice should investigate for possible impairment.Below is information related to the plant's assets ($ in millions): The amount of impairment loss that Rice should recognize according to U.S.GAAP and IFRS,respectively,is:

Comet Cleaning Co.reported the following on its December 31,2016,balance sheet: Equipment (at cost)$3,000,000 In a disclosure note,Comet indicates that it uses straight-line depreciation over six years and estimates salvage value as 10% of cost.Comet's equipment averages 4.5 years at December 31,2016. Required: What is the book value of Comet's equipment at December 31,2016?

Compute depreciation for 2016 and 2017 and the book value of the machinery at December 31,2016 and 2017,assuming double-declining balance method is used.

The physical life of a depreciable asset is bounded by its service life.

According to International Financial Reporting Standards (IFRS) ,the level of testing for goodwill impairment is the: