Question 1

The amount of depreciation expense for a fixed asset costing $95,000, with an estimated residual value of $5,000 and a useful life of 5 years or 20,000 operating hours, is $21,375 by the units-of-output method during a period when the asset was used for 4,500 hours.

Accepted Answer

A) True 
 B)False

Question 2

A characteristic of a fixed asset is that it is

Accepted Answer

A)   used in the operations of a business
B)   a short-term investment
C)   intangible
D)   held for sale in the ordinary course of the businessE) A) and D)
F) None of the above

Question 3

Classify each of the following costs associated with long-lived assets as one of the following:
-Repairs made to used office equipment

Accepted Answer

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

Question 4

On December 31, Strike Company traded-in one of its batting cages for another one that has a cost of $500,000. Strike receives a trade-in allowance of $11,000. The old equipment had an initial cost of $215,000 and has accumulated depreciation of $185,000. Depreciation has been recorded up to the end of the year. The difference will be paid in cash. What is the amount of the gain or loss on this transaction?

Accepted Answer

A)   loss of $11,000
B)   no loss or gain will be recorded
C)   loss of $19,000
D)   gain of $11,000E) A) and B)
F) A) and C)

Question 5

A fixed asset with a cost of $52,000 and accumulated depreciation of $47,500 is traded for a similar asset priced at $60,000 fair market value)  in a transaction with commercial substance. Assuming a trade-in allowance of $5,000, at what cost will the new equipment be recorded in the books?

Accepted Answer

A)   $60,500
B)   $60,000
C)   $54,000
D)   $59,500E) A) and C)
F) A) and B)

Question 6

Classify each of the following as:
-Overhauling an engine in a large truck

Accepted Answer

A)  Ordinary maintenance and repairs
B)  Asset improvements
C)  Extraordinary repairsD) A) and C)
E) B) and C)

Question 7

When a company discards machinery that is fully depreciated, this transaction would be recorded with the following entry

Accepted Answer

A)   debit Accumulated Depreciation; credit Machinery
B)   debit Machinery; credit Accumulated Depreciation
C)   debit Depreciation Expense; credit Accumulated Depreciation
D)   debit Cash; credit Accumulated DepreciationE) All of the above
F) A) and C)

Question 8

Standby equipment held for use in the event of a breakdown of regular equipment is reported as property, plant, and equipment on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 9

When selling a piece of equipment for cash, a loss will result when the proceeds of the sale are less than the book value of the asset.

Accepted Answer

A) True 
 B)False

Question 10

Classify each of the following costs associated with long-lived assets as one of the following:
-Costs of government permits required to develop land for a new business location

Accepted Answer

A)  Buildings
B)  Machinery and equipment
C)  Land
D)  Land improvementsE) All of the above
F) C) and D)

Question 11

The double-declining-balance depreciation method calculates depreciation each year by taking twice the straight- line rate times the book value of the asset at the beginning of each year.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is included in the cost of constructing a building?

Accepted Answer

A)   cost of paving the parking lot
B)   cost of removing the demolished building existing on the land when it was purchased
C)   insurance costs during construction
D)   cost of repairing vandalism damage during constructionE) B) and C)
F) A) and B)

Question 13

Classify each of the following as:
-New landscaping

Accepted Answer

A)  Ordinary maintenance and repairs
B)  Asset improvements
C)  Extraordinary repairsD) B) and C)
E) A) and B)

Question 14

On December 31, Strike Company sold one of its batting cages for $50,000. The equipment had an original cost of $310,000 and has accumulated depreciation of $260,000. Depreciation has been recorded up to the end of the year. What is the amount of the gain or loss on this transaction?

Accepted Answer

A)   no gain or loss
B)   loss of $50,000
C)   gain of $50,000
D)   cannot be determinedE) A) and B)
F) A) and C)

Question 15

A capitalized asset will appear on the balance sheet as a long-term asset.

Accepted Answer

A) True 
 B)False

Question 16

Match the intangible assets described with their proper classification a-d) .
-I-Tunes music

Accepted Answer

A)  Patent
B)  Copyright
C)  Trademark
D)  GoodwillE) None of the above
F) B) and D)

Question 17

Convert each of the following estimates of useful life to a straight-line depreciation rate, stated as a percentage.
1) 2 years
2) 8 years
3) 10 years
4) 20 years
5) 25 years
6) 40 years
7) 50 years

Accepted Answer

1) 50% 1/2)2) 12.5% ...

Question 18

On December 31, Strike Company sold one of its batting cages for $20,000. The equipment had an initial cost of $310,000 and had accumulated depreciation of $260,000. Depreciation has been recorded up to the end of the year. What is the amount of the gain or loss on this transaction?

Accepted Answer

A)   gain of $20,000
B)   loss of $30,000
C)   gain of $20,000.
D)   loss of $30,000.E) B) and C)
F) All of the above

Question 19

An intangible asset is one that has a physical existence.

Accepted Answer

A) True 
 B)False

Question 20

A fixed asset with a cost of $41,000 and accumulated depreciation of $36,000 is traded for a similar asset priced at $50,000 fair market value)  in a transaction with commercial substance. Assuming a trade-in allowance of $4,000, at what cost will the new equipment be recorded in the books?

Accepted Answer

A)   $50,000
B)   $45,000
C)   $51,000
D)   $54,000E) All of the above
F) A) and B)

Exam 9: Fixed Assets and Intangible Assets

A capitalized asset will appear on the balance sheet as a long-term asset.

Correct Answer
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An intangible asset is one that has a physical existence.

Correct Answer
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Classify each of the following as: -New landscaping

Correct Answer
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Which of the following is included in the cost of constructing a building?

Correct Answer
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Classify each of the following as: -Overhauling an engine in a large truck

Correct Answer
verified

The amount of depreciation expense for a fixed asset costing $95,000, with an estimated residual value of $5,000 and a useful life of 5 years or 20,000 operating hours, is $21,375 by the units-of-output method during a period when the asset was used for 4,500 hours.

Correct Answer
verified

Standby equipment held for use in the event of a breakdown of regular equipment is reported as property, plant, and equipment on the balance sheet.

Correct Answer
verified

Correct Answer
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On December 31, Strike Company sold one of its batting cages for $20,000. The equipment had an initial cost of $310,000 and had accumulated depreciation of $260,000. Depreciation has been recorded up to the end of the year. What is the amount of the gain or loss on this transaction?

Correct Answer
verified

Match the intangible assets described with their proper classification a-d) . -I-Tunes music

Correct Answer
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Classify each of the following costs associated with long-lived assets as one of the following: -Repairs made to used office equipment

Correct Answer
verified

When a company discards machinery that is fully depreciated, this transaction would be recorded with the following entry

Correct Answer
verified

A fixed asset with a cost of $52,000 and accumulated depreciation of $47,500 is traded for a similar asset priced at $60,000 fair market value) in a transaction with commercial substance. Assuming a trade-in allowance of $5,000, at what cost will the new equipment be recorded in the books?

Correct Answer
verified

When selling a piece of equipment for cash, a loss will result when the proceeds of the sale are less than the book value of the asset.

Correct Answer
verified

Classify each of the following costs associated with long-lived assets as one of the following: -Costs of government permits required to develop land for a new business location

Correct Answer
verified

On December 31, Strike Company sold one of its batting cages for $50,000. The equipment had an original cost of $310,000 and has accumulated depreciation of $260,000. Depreciation has been recorded up to the end of the year. What is the amount of the gain or loss on this transaction?

Correct Answer
verified

Convert each of the following estimates of useful life to a straight-line depreciation rate, stated as a percentage. 1) 2 years 2) 8 years 3) 10 years 4) 20 years 5) 25 years 6) 40 years 7) 50 years

Correct Answer
verified
1) 50% 1/2)2) 12.5% ...
View Answer

A characteristic of a fixed asset is that it is

Correct Answer
verified

The double-declining-balance depreciation method calculates depreciation each year by taking twice the straight- line rate times the book value of the asset at the beginning of each year.

Correct Answer
verified

A fixed asset with a cost of $41,000 and accumulated depreciation of $36,000 is traded for a similar asset priced at $50,000 fair market value) in a transaction with commercial substance. Assuming a trade-in allowance of $4,000, at what cost will the new equipment be recorded in the books?

Correct Answer
verified

Exam 9: Fixed Assets and Intangible Assets

A capitalized asset will appear on the balance sheet as a long-term asset.

Correct AnswerverifiedShow Answer

An intangible asset is one that has a physical existence.

Correct AnswerverifiedShow Answer

Classify each of the following as: -New landscaping

Correct AnswerverifiedShow Answer

Which of the following is included in the cost of constructing a building?

Correct AnswerverifiedShow Answer

Classify each of the following as: -Overhauling an engine in a large truck

Correct AnswerverifiedShow Answer

The amount of depreciation expense for a fixed asset costing $95,000, with an estimated residual value of $5,000 and a useful life of 5 years or 20,000 operating hours, is $21,375 by the units-of-output method during a period when the asset was used for 4,500 hours.

Correct AnswerverifiedShow Answer

Standby equipment held for use in the event of a breakdown of regular equipment is reported as property, plant, and equipment on the balance sheet.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

On December 31, Strike Company sold one of its batting cages for $20,000. The equipment had an initial cost of $310,000 and had accumulated depreciation of $260,000. Depreciation has been recorded up to the end of the year. What is the amount of the gain or loss on this transaction?

Correct AnswerverifiedShow Answer

Match the intangible assets described with their proper classification a-d) . -I-Tunes music

Correct AnswerverifiedShow Answer

Classify each of the following costs associated with long-lived assets as one of the following: -Repairs made to used office equipment

Correct AnswerverifiedShow Answer

When a company discards machinery that is fully depreciated, this transaction would be recorded with the following entry

Correct AnswerverifiedShow Answer

A fixed asset with a cost of $52,000 and accumulated depreciation of $47,500 is traded for a similar asset priced at $60,000 fair market value) in a transaction with commercial substance. Assuming a trade-in allowance of $5,000, at what cost will the new equipment be recorded in the books?

Correct AnswerverifiedShow Answer

When selling a piece of equipment for cash, a loss will result when the proceeds of the sale are less than the book value of the asset.

Correct AnswerverifiedShow Answer

Classify each of the following costs associated with long-lived assets as one of the following: -Costs of government permits required to develop land for a new business location

Correct AnswerverifiedShow Answer

On December 31, Strike Company sold one of its batting cages for $50,000. The equipment had an original cost of $310,000 and has accumulated depreciation of $260,000. Depreciation has been recorded up to the end of the year. What is the amount of the gain or loss on this transaction?

Correct AnswerverifiedShow Answer

Convert each of the following estimates of useful life to a straight-line depreciation rate, stated as a percentage. 1) 2 years 2) 8 years 3) 10 years 4) 20 years 5) 25 years 6) 40 years 7) 50 years

Correct Answerverified1) 50% 1/2)2) 12.5% ...View AnswerShow Answer

A characteristic of a fixed asset is that it is

Correct AnswerverifiedShow Answer

The double-declining-balance depreciation method calculates depreciation each year by taking twice the straight- line rate times the book value of the asset at the beginning of each year.

Correct AnswerverifiedShow Answer

A fixed asset with a cost of $41,000 and accumulated depreciation of $36,000 is traded for a similar asset priced at $50,000 fair market value) in a transaction with commercial substance. Assuming a trade-in allowance of $4,000, at what cost will the new equipment be recorded in the books?

Correct AnswerverifiedShow Answer

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Correct Answer
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1) 50% 1/2)2) 12.5% ...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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