Question 1

MACRS (modified accelerated cost recovery system)depreciation is equivalent to sum-of-the-years' digits depreciation.

Accepted Answer

A) True 
 B)False

Question 2

A major expenditure increased a truck's life beyond the original estimate of life.GAAP permits the expenditure to be debited to:

Accepted Answer

A)  Repairs.
B)  Accumulated depreciation.
C)  Major repairs.
D)  None of these answer choices are correct.E) A) and C)
F) A) and B)

Question 3

Briefly discuss the factors that determine the service life of a depreciable asset.

Accepted Answer

The physical life sets the max...

Question 4

Belotti would record depletion in 2016 of:

Accepted Answer

A)  $41,000.
B)  $32,800.
C)  $30,750.
D)  $24,600.E) A) and B)
F) A) and C)

Question 5

Recognition of impairment for property,plant,and equipment is required if book value exceeds:

Accepted Answer

A)  Fair value.
B)  Present value of expected cash flows.
C)  Undiscounted expected cash flows.
D)  Accumulated depreciation.E) None of the above
F) A) and B)

Question 6

Depreciation (to the nearest dollar) for 2016,using sum-of-the-years' digits,would be:

Accepted Answer

A)  $ 9,091.
B)  $24,545.
C)  $27,273.
D)  $ 8,182.E) A) and C)
F) A) and D)

Question 7

On September 30,2016,Morgan,Inc.acquired all of the outstanding common stock of Pathways,Inc. ,for $100 million.In addition to tangible assets,Morgan recorded the following assets as a result of the acquisition:  
Morgan's policy is to amortize intangible assets using the straight-line method,no residual value,and a six-year useful life.
Required:
What is the total amount of expenses that would appear in Morgan's income statement for the year ended December 31,2016,related to these items?

Accepted Answer

Expenses for the year include:...

Question 8

International Financial Reporting Standards (IFRS)require goodwill to be tested for impairment at least annually.

Accepted Answer

A) True 
 B)False

Question 9

According to International Financial Reporting Standards (IFRS),the costs to successfully defend an intangible right normally are capitalized and amortized.

Accepted Answer

A) True 
 B)False

Question 10

Briefly explain the differences between the terms depreciation,depletion,and amortization.

Accepted Answer

The terms refer to different t...

Question 11

The overriding principle for all depreciation methods is that the method must be:

Accepted Answer

A)  Conservative and economic.
B)  Systematic and rational.
C)  Consistent and conservative.
D)  Significant and material.E) B) and C)
F) C) and D)

Question 12

Nanki Corporation purchased equipment on January 1,2014,for $650,000.In 2014 and 2015,Nanki depreciated the asset on a straight-line basis with an estimated useful life of eight years and a $10,000 residual value.In 2016,due to changes in technology,Nanki revised the useful life to a total of six years with no residual value.What depreciation would Nanki record for the year 2016 on this equipment?

Accepted Answer

A)  $108,333.
B)  $106,667.
C)  $122,500.
D)  None of these answer choices are correct.E) B) and C)
F) A) and C)

Question 13

The table below contains data on depreciation for machinery.
Required: Fill in the missing data in the table.

Accepted Answer

The answer of The table below contains data on depreciation...

Question 14

According to International Financial Reporting Standards (IFRS),property,plant,and equipment must be valued at cost less accumulated depreciation.

Accepted Answer

A) True 
 B)False

Question 15

Changes in the estimates involved in depreciation,depletion,and amortization require retroactive restatement of financial statements.

Accepted Answer

A) True 
 B)False

Question 16

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.

Accepted Answer

The answer of Listed below are five terms followed by...

Question 17

In December of 2016,XL Computer's internal auditors discovered that office equipment costing $800,000 was charged to expense in 2014.The asset had an expected life of 10 years with no residual value.XL would have recorded a half year of depreciation in 2014.
Required:
Prepare the necessary correcting entry that would be made in 2016 (ignore income taxes),and the entry to record depreciation for 2016.

Accepted Answer

$800,000 ...

Question 18

Briefly differentiate between activity-based and time-based allocation methods.

Accepted Answer

Time-based methods allocate an asset's c...

Question 19

Using the double-declining balance method,depreciation for 2016 and book value at December 31,2016,would be:

Accepted Answer

A)  $22,500 and $22,500.
B)  $22,500 and $17,500.
C)  $20,000 and $25,000.
D)  $20,000 and $20,000.E) All of the above
F) A) and B)

Question 20

Statutory depletion is the maximum amount of depletion that may be reported in financial statements prepared according to GAAP.

Accepted Answer

A) True 
 B)False

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

Statutory depletion is the maximum amount of depletion that may be reported in financial statements prepared according to GAAP.

Correct Answer
verified

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.

Correct Answer
verified

Briefly explain the differences between the terms depreciation,depletion,and amortization.

Correct Answer
verified
The terms refer to different t...
View Answer

Changes in the estimates involved in depreciation,depletion,and amortization require retroactive restatement of financial statements.

Correct Answer
verified

Recognition of impairment for property,plant,and equipment is required if book value exceeds:

Correct Answer
verified

The table below contains data on depreciation for machinery. Required: Fill in the missing data in the table.

Correct Answer
verified

Depreciation (to the nearest dollar) for 2016,using sum-of-the-years' digits,would be:

Correct Answer
verified

A major expenditure increased a truck's life beyond the original estimate of life.GAAP permits the expenditure to be debited to:

Correct Answer
verified

International Financial Reporting Standards (IFRS)require goodwill to be tested for impairment at least annually.

Correct Answer
verified

According to International Financial Reporting Standards (IFRS),property,plant,and equipment must be valued at cost less accumulated depreciation.

Correct Answer
verified

Briefly discuss the factors that determine the service life of a depreciable asset.

Correct Answer
verified
The physical life sets the max...
View Answer

MACRS (modified accelerated cost recovery system)depreciation is equivalent to sum-of-the-years' digits depreciation.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

$800,000 ...
View Answer

Correct Answer
verified
Expenses for the year include:...
View Answer

Briefly differentiate between activity-based and time-based allocation methods.

Correct Answer
verified
Time-based methods allocate an asset's c...
View Answer

Using the double-declining balance method,depreciation for 2016 and book value at December 31,2016,would be:

Correct Answer
verified

The overriding principle for all depreciation methods is that the method must be:

Correct Answer
verified

According to International Financial Reporting Standards (IFRS),the costs to successfully defend an intangible right normally are capitalized and amortized.

Correct Answer
verified

Belotti would record depletion in 2016 of:

Correct Answer
verified

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

Statutory depletion is the maximum amount of depletion that may be reported in financial statements prepared according to GAAP.

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

Briefly explain the differences between the terms depreciation,depletion,and amortization.

Correct AnswerverifiedThe terms refer to different t...View AnswerShow Answer

Changes in the estimates involved in depreciation,depletion,and amortization require retroactive restatement of financial statements.

Correct AnswerverifiedShow Answer

Recognition of impairment for property,plant,and equipment is required if book value exceeds:

Correct AnswerverifiedShow Answer

The table below contains data on depreciation for machinery. Required: Fill in the missing data in the table.

Correct AnswerverifiedShow Answer

Depreciation (to the nearest dollar) for 2016,using sum-of-the-years' digits,would be:

Correct AnswerverifiedShow Answer

A major expenditure increased a truck's life beyond the original estimate of life.GAAP permits the expenditure to be debited to:

Correct AnswerverifiedShow Answer

International Financial Reporting Standards (IFRS)require goodwill to be tested for impairment at least annually.

Correct AnswerverifiedShow Answer

According to International Financial Reporting Standards (IFRS),property,plant,and equipment must be valued at cost less accumulated depreciation.

Correct AnswerverifiedShow Answer

Briefly discuss the factors that determine the service life of a depreciable asset.

Correct AnswerverifiedThe physical life sets the max...View AnswerShow Answer

MACRS (modified accelerated cost recovery system)depreciation is equivalent to sum-of-the-years' digits depreciation.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answerverified $800,000 ...View AnswerShow Answer

Correct AnswerverifiedExpenses for the year include:...View AnswerShow Answer

Briefly differentiate between activity-based and time-based allocation methods.

Correct AnswerverifiedTime-based methods allocate an asset's c...View AnswerShow Answer

Using the double-declining balance method,depreciation for 2016 and book value at December 31,2016,would be:

Correct AnswerverifiedShow Answer

The overriding principle for all depreciation methods is that the method must be:

Correct AnswerverifiedShow Answer

According to International Financial Reporting Standards (IFRS),the costs to successfully defend an intangible right normally are capitalized and amortized.

Correct AnswerverifiedShow Answer

Belotti would record depletion in 2016 of:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The terms refer to different t...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
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Correct Answer
verified
The physical life sets the max...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

$800,000 ...
View Answer

Correct Answer
verified
Expenses for the year include:...
View Answer

Correct Answer
verified
Time-based methods allocate an asset's c...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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