FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 8: Accounting for Long-Term Assets

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 51

Short Answer

Review LaterAdd Note

Review Later

________ is an estimate of an asset's value at the end of its benefit period (or useful life).

Correct Answer

verified

Salvage va...

View Answer

Show Answer

Question 52

Essay

Review LaterAdd Note

Review Later

A company purchased store equipment for $4,300 by trading in old equipment with a cost of $2,000 and that had accumulated depreciation of $1,900 as of the exchange date.The company received a $75 trade-in allowance for the old equipment with the balance of $4,225 paid in cash.Prepare the journal entry to record the exchange,assuming the transaction had commercial substance.

Correct Answer

verified

None...

View Answer

Show Answer

Question 53

Multiple Choice

Review LaterAdd Note

Total asset turnover is used to evaluate:

The total cost of an asset less its accumulated depreciation is called:

Salvage value is an estimate of an asset's value at the end of its benefit period.

Gain or loss on the disposal of assets is determined by comparing the disposed asset's book value to the market value of any assets received.

On July 1 of the current year,Timberlake Company signed a contract to sublease space in a building for 7 years.Timberlake Company paid $56,000 for the right to sublease this space.After taking possession of the leased space,Timberlake pays $140,000 for improving the office portion of the lease space.The improvements are paid on July 6 of the current year,and are estimated to have a useful life equal to the 14 years remaining in the life of the building.Prepare entries for Timberlake to record (a)its payment for the right to sublease the building space, (b)its payment for the office improvements, (c)the December 31 year-end entry to amortize the cost of the sublease, (d)the December 31 year-end entry to amortize the office improvements.

Beckman Enterprises purchased a depreciable asset on October 1,Year 1 at a cost of $100,000.The asset is expected to have a salvage value of $20,000 at the end of its five-year useful life.If the asset is depreciated on the double-declining-balance method,the asset's book value on December 31,Year 2 will be:

Plant assets are used in operations and have useful lives that extend over more than one accounting period.

The Modified Accelerated Cost Recovery System (MACRS)is part of the U.S.federal income tax laws and may be used for financial reporting.

Ngu owns equipment that cost $93,500 with accumulated depreciation of $64,000.Ngu asks $35,000 for the equipment but sells the equipment for $33,000.Compute the amount of gain or loss on the sale.

Depreciation does not measure the decline in market value of an asset each period.

Depreciation:

Minor Company installs a machine in its factory at the beginning of the year at a cost of $135,000.The machine's useful life is estimated to be 5 years,or 300,000 units of product,with a $15,000 salvage value.During its first year,the machine produces 64,500 units of product. -Determine the machines' first year depreciation under the straight-line method.

A company purchased and installed machinery on January 1 at a total cost of $93,000.Straight-line depreciation was calculated based on the assumption of a five-year life and no salvage value.The machinery was disposed of on July 1 of year four.The company uses the calendar year. 1.Prepare the general journal entry to update depreciation to July 1 in year four. 2.Prepare the general journal entry to record the sale of the machine for $27,000 cash.

Which of the following is not classified as plant assets?

A company purchased a weaving machine for $190,000.The machine has a useful life of 8 years and a residual value of $10,000.It is estimated that the machine could produce 75,000 bolts of woven fabric over its useful life.In the first year,15,000 bolts were produced.In the second year,production increased to 19,000 units. -Using the units-of-production method,what is the amount of accumulated depreciation at the end of the second year?

Minor Company installs a machine in its factory at the beginning of the year at a cost of $135,000.The machine's useful life is estimated to be 5 years,or 300,000 units of product,with a $15,000 salvage value.During its first year,the machine produces 64,500 units of product. -Determine the machines' first year depreciation under the units-of-production method.

A machine costing $450,000 with a 4-year life and an estimated salvage value of $30,000 is installed by Peters Company on January 1.The company estimates the machine will produce 1,050,000 units of product during its life.It actually produces the following units for the first 2 years: Year 1,260,000; Year 2,275,000.Enter the depreciation amounts for years 1 and 2 in the table below for each depreciation method.Show calculation of amounts below the table. Year 1 Year 2

Capital expenditures,also called balance sheet expenditures,are additional costs of plant assets that provide benefits extending beyond the current period.