FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 18: Property, Plant, and Equipment

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 31

Multiple Choice

Review LaterAdd Note

Review Later

Intangible assets may be purchased or developed. If developed, they are categorized as Research and Development and:

A) expensed in the period in which the cost is incurred.
B) amortized over their useful life.
C) depleted over their useful life.
D) depreciated over their useful life.

E) None of the above
F) A) and C)

Correct Answer

verified

Show Answer

Question 32

Multiple Choice

Review LaterAdd Note

Review Later

An asset that cost $64,000 was sold for $20,000 cash. Accumulated depreciation on the asset was $41,000. The entry to record this transaction includes the recognition of:

A) a gain of $3,000.
B) a loss of $5,000.
C) neither a gain nor a loss.
D) a loss of $3,000.

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

Correct Answer

verified

Show Answer

Question 33

Essay

Review LaterAdd Note

JRB Preschool purchased a van used in the business three years ago for $36,500. The accumulated depreciation account related to the equipment asset account had a balance of $18,000. The equipment had an estimated salvage (residual)value of $6,500 and had an estimated life of five years. A full year's depreciation was taken the first year. JRB uses the straight-line depreciation method. All depreciation is usually recorded at year end. The company sold the equipment in exchange for a promissory note on July 1 of the fourth year for $12,000. Record the appropriate entries necessary.

The difference between the acquisition cost of an asset and its accumulated depreciation is called the----------- .

An asset that cost $35,000 was sold for $10,000 cash. Accumulated depreciation on the asset was $29,000. The entry to record this transaction includes the recognition of:

A business purchased equipment for $52,500 in March of the current year. The machine is expected to provide useful output of 100,000 units over its expected useful life. At the end of its useful life, the machine has an expected residual value of $2,500. Actual output for the current year was 35,000 units. Using the units-of-output method, the current year depreciation expense is $17,500.

Using the information shown, calculate the depreciation for 2019, 2020, and 2021 under the double-declining-balance method (DDB).

At the beginning of the current year a firm purchased an asset for $60,000 and estimates that it will have a useful life of five years and a salvage value of $5,000. Under the double-declining-balance method, the depreciation expense for the first year of the asset's useful life is:

At the beginning of the current year a firm purchased an asset for $60,000 and estimates that it will have a useful life of five years and a salvage value of $5,000. Under the double-declining-balance method, the depreciation expense for the second year of the asset's useful life is:

A company uses the units-of-output method of computing depreciation on its fleet of cars. A car that costs $44,800 is expected to have a useful life of 85,000 miles and an expected salvage value of $4,000. The rate for each mile is-------------- .

Using the information shown, prepare the journal entry for the purchase of the Office Furniture assuming it was purchased on credit by signing a note and prepare the journal entry for the Office Equipment purchase assuming that a check was written for it.

For financial accounting purposes, when an asset is traded in for a similar asset, a gain is reported if the trade-in allowance exceeds the book value of the asset traded in.

Define intangible assets. List several examples of intangible assets. How are intangible assets handled for financial reporting if their lives can be estimated? How are they handled for financial reporting if their lives cannot be estimated?

Harrod's Landscape Artists acquired a new truck for $42,000 less the trade-in allowance of $6,000 for his old truck. The old truck was purchased for $31,000 and had a book value of $5,000 on the exchange date. The entry to record the acquisition of the new truck will include a debit to the Truck account for:

The adjusting entry to record depletion for the period includes a credit to the Depletion Expense account.

The process by which the cost of natural resources extracted are allocated is:

The Modified Accelerated Cost Recovery System (MACRS)was designed to encourage taxpayers to invest in business property by providing them with an accelerated depreciation method that lowered or postponed payment of income tax.

In determining the impairment of a long-term asset, the------------ test is used to compare the asset's net book value with estimated cash flows from the asset's future use.

Net Book Value is the difference between the net acquisition cost of an asset and its fair market value.

Which of the following is NOT a class under MACRS for personal property?