Question 1

XYZ Co. incurred the following costs related to the office building used in operating its sports supply company:
a. Replaced a broken window.
b. Replaced the roof that had been on the building 23 years.
c. Serviced all the air conditioners before summer started.
d. Replaced the air conditioners in the customer service areas.
e. Added a warehouse to the back of the building.
f. Repainted the interior walls.
g. Installed window shutters on all windows.

Accepted Answer

a. Revenue expenditure
b. Capital expend...

Question 2

Regardless of the depreciation method, the amount that will be depreciated during the life of the asset will be the same.

Accepted Answer

A) True 
 B)False

Question 3

Williams Company acquired machinery on July 1, Year 1, at a cost of $130,000. The estimated useful life of the machinery was 10 years and the estimated residual value was $10,000. Williams uses the double-declining-balance method of depreciation. On October 1, Year 4, Williams sold the equipment for $75,000.
1) Record the journal entry for the depreciation on this machinery for Year 4.
2) Record the journal entry for the sale of the machinery.

Accepted Answer

1) $13,000 $130,000 × 0.20 × 6/12)Deprec...

Question 4

On April 15, Compton Co. paid $2,800 to upgrade a delivery truck and $125 for an oil change. Journalize the entries for the upgrade to delivery truck and oil change expenditures.

Accepted Answer

The answer of On April 15, Compton Co. paid $2,800...

Question 5

Match the intangible assets described with their proper classification a-d) .
-Location of a company

Accepted Answer

A)  Patent
B)  Copyright
C)  Trademark
D)  GoodwillE) B) and D)
F) A) and B)

Question 6

The cost of repairing damage to a machine during installation is debited to a fixed asset account.

Accepted Answer

A) True 
 B)False

Question 7

The Weber Company purchased a mining site for $1,750,000 on July 1. The company expects to mine ore for the next 10 years and anticipates that a total of 400,000 tons will be recovered. The estimated residual value of the property is $150,000. During the first year, the company extracted 6,500 tons of ore. The depletion expense is

Accepted Answer

A)   $15,000
B)   $16,000
C)   $17,500
D)   $26,000E) None of the above
F) A) and B)

Question 8

An exchange is said to have commercial substance if future cash flows remain the same as a result of the exchange.

Accepted Answer

A) True 
 B)False  False

Question 9

Classify each of the following costs associated with long-lived assets as one of the following:
-Cost of grading and leveling land to be used for a new business site

Accepted Answer

A)  Land improvements
B)  Buildings
C)  Land
D)  Machinery and equipmentE) A) and D)
F) C) and D)

Question 10

The higher the fixed asset turnover, the

Accepted Answer

A)   more efficiently a company is using its fixed assets in generating sales
B)   more efficiently a company is using its intangible assets in generating sales
C)   less efficiently a company is using its fixed assets in generating sales
D)   more efficiently a company is using its current assets in generating salesE) A) and B)
F) None of the above

Question 11

Classify each of the following costs associated with long-lived assets as one of the following:
-Supplies materials)  used to test new equipment

Accepted Answer

A)  Land improvements
B)  Buildings
C)  Land
D)  Machinery and equipmentE) None of the above
F) All of the above

Question 12

During construction of a building, the cost of interest on a construction loan should be charged to an expense account.

Accepted Answer

A) True 
 B)False  False

Question 13

Fill in the missing numbers using the formula for fixed asset turnover:

Accepted Answer

The answer of Fill in the missing numbers using the...

Question 14

Capital expenditures are costs that are charged to stockholders' equity accounts.

Accepted Answer

A) True 
 B)False

Question 15

A capital expenditure results in a debit to

Accepted Answer

A)   an asset account
B)   an expense account
C)   a liability account
D)   a capital accountE) B) and D)
F) B) and C)

Question 16

Match each account name to the financial statement section a-i)  in which it would appear.
-Depreciation Expense

Accepted Answer

A)  Current Assets
B)  Fixed Assets
C)  Intangible Assets
D)  Current Liability
E)  Long-Term LiabilityF) Owners' EquityG) RevenuesH) Operating ExpensesI) Other Income/ExpenseJ) B) and F)
K) D) and F)

Question 17

Match the intangible assets described with their proper classification a-d) .
-McDonald's golden arches

Accepted Answer

A)  Patent
B)  Copyright
C)  Trademark
D)  GoodwillE) A) and B)
F) A) and C)

Question 18

Classify each of the following costs associated with long-lived assets as one of the following:
-Fees paid to architect to design new office building

Accepted Answer

A)  Buildings
B)  Machinery and equipment
C)  Land
D)  Land improvementsE) C) and D)
F) A) and C)

Question 19

A fixed asset with a cost of $30,000 and accumulated depreciation of $28,500 is sold for $3,500. What is the amount of the gain or loss on disposal of the fixed asset?

Accepted Answer

A)   $2,000 loss
B)   $2,000 gain
C)   $1,500 loss
D)   $3,500 gainE) A) and C)
F) B) and D) B

Question 20

On June 1, Michael Company purchased equipment at a cost of $120,000 that has a depreciable cost of $90,000 and an estimated useful life of 3 years or 30,000 hours. Using straight-line depreciation, calculate depreciation expense for the second year.

Accepted Answer

A)   $17,500
B)   $12,500
C)   $30,000
D)   $40,000E) B) and D)
F) A) and C)

Exam 9: Fixed Assets and Intangible Assets

Correct Answer
verified
a. Revenue expenditure
b. Capital expend...
View Answer

Regardless of the depreciation method, the amount that will be depreciated during the life of the asset will be the same.

Correct Answer
verified

Correct Answer
verified
1) $13,000 $130,000 × 0.20 × 6/12)Deprec...
View Answer

On April 15, Compton Co. paid $2,800 to upgrade a delivery truck and $125 for an oil change. Journalize the entries for the upgrade to delivery truck and oil change expenditures.

Correct Answer
verified

Match the intangible assets described with their proper classification a-d) . -Location of a company

Correct Answer
verified

The cost of repairing damage to a machine during installation is debited to a fixed asset account.

Correct Answer
verified

Correct Answer
verified

An exchange is said to have commercial substance if future cash flows remain the same as a result of the exchange.

Correct Answer
verified
False

Classify each of the following costs associated with long-lived assets as one of the following: -Cost of grading and leveling land to be used for a new business site

Correct Answer
verified

The higher the fixed asset turnover, the

Correct Answer
verified

Classify each of the following costs associated with long-lived assets as one of the following: -Supplies materials) used to test new equipment

Correct Answer
verified

During construction of a building, the cost of interest on a construction loan should be charged to an expense account.

Correct Answer
verified
False

Fill in the missing numbers using the formula for fixed asset turnover:

Correct Answer
verified

Capital expenditures are costs that are charged to stockholders' equity accounts.

Correct Answer
verified

A capital expenditure results in a debit to

Correct Answer
verified

Match each account name to the financial statement section a-i) in which it would appear. -Depreciation Expense

Correct Answer
verified

Match the intangible assets described with their proper classification a-d) . -McDonald's golden arches

Correct Answer
verified

Classify each of the following costs associated with long-lived assets as one of the following: -Fees paid to architect to design new office building

Correct Answer
verified

A fixed asset with a cost of $30,000 and accumulated depreciation of $28,500 is sold for $3,500. What is the amount of the gain or loss on disposal of the fixed asset?

Correct Answer
verified
B

On June 1, Michael Company purchased equipment at a cost of $120,000 that has a depreciable cost of $90,000 and an estimated useful life of 3 years or 30,000 hours. Using straight-line depreciation, calculate depreciation expense for the second year.

Correct Answer
verified

Exam 9: Fixed Assets and Intangible Assets

Correct Answerverifieda. Revenue expenditureb. Capital expend...View AnswerShow Answer

Regardless of the depreciation method, the amount that will be depreciated during the life of the asset will be the same.

Correct AnswerverifiedShow Answer

Correct Answerverified1) $13,000 $130,000 × 0.20 × 6/12)Deprec...View AnswerShow Answer

On April 15, Compton Co. paid $2,800 to upgrade a delivery truck and $125 for an oil change. Journalize the entries for the upgrade to delivery truck and oil change expenditures.

Correct AnswerverifiedShow Answer

Match the intangible assets described with their proper classification a-d) . -Location of a company

Correct AnswerverifiedShow Answer

The cost of repairing damage to a machine during installation is debited to a fixed asset account.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

An exchange is said to have commercial substance if future cash flows remain the same as a result of the exchange.

Correct AnswerverifiedFalse

Classify each of the following costs associated with long-lived assets as one of the following: -Cost of grading and leveling land to be used for a new business site

Correct AnswerverifiedShow Answer

The higher the fixed asset turnover, the

Correct AnswerverifiedShow Answer

Classify each of the following costs associated with long-lived assets as one of the following: -Supplies materials) used to test new equipment

Correct AnswerverifiedShow Answer

During construction of a building, the cost of interest on a construction loan should be charged to an expense account.

Correct AnswerverifiedFalse

Fill in the missing numbers using the formula for fixed asset turnover:

Correct AnswerverifiedShow Answer

Capital expenditures are costs that are charged to stockholders' equity accounts.

Correct AnswerverifiedShow Answer

A capital expenditure results in a debit to

Correct AnswerverifiedShow Answer

Match each account name to the financial statement section a-i) in which it would appear. -Depreciation Expense

Correct AnswerverifiedShow Answer

Match the intangible assets described with their proper classification a-d) . -McDonald's golden arches

Correct AnswerverifiedShow Answer

Classify each of the following costs associated with long-lived assets as one of the following: -Fees paid to architect to design new office building

Correct AnswerverifiedShow Answer

A fixed asset with a cost of $30,000 and accumulated depreciation of $28,500 is sold for $3,500. What is the amount of the gain or loss on disposal of the fixed asset?

Correct AnswerverifiedB

On June 1, Michael Company purchased equipment at a cost of $120,000 that has a depreciable cost of $90,000 and an estimated useful life of 3 years or 30,000 hours. Using straight-line depreciation, calculate depreciation expense for the second year.

Correct AnswerverifiedShow Answer

Correct Answer
verified
a. Revenue expenditure
b. Capital expend...
View Answer

Correct Answer
verified

Correct Answer
verified
1) $13,000 $130,000 × 0.20 × 6/12)Deprec...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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False

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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False

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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B

Correct Answer
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