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Exam 10: Long-Term Assets: Fixed and Intangible

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Question 51

Multiple Choice

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The natural resources of some companies include

A) timber, metal ores, and minerals
B) timber, equipment, and patents
C) minerals, trademarks, and land
D) metal ores, copyrights, and supplies

E) B) and D)
F) C) and D)

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Question 52

Multiple Choice

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

A) Patent
B) Copyright
C) Trademark
D) Goodwill

E) C) and D)
F) B) and D)

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Question 53

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A machine costing $185,000 with a five-year life and $20,000 residual value was purchased January 2. Compute depreciation for each of the five years, using the double-declining-balance method.

A capital expenditure results in a debit to a (n)

Computer equipment was acquired at the beginning of the year at a cost of $65,000 that has an estimated residual value of $3,800 and an estimated useful life of eight years. Determine the (a) depreciable cost, (b) straight-line rate, and (c) annual straight-line depreciation.

Match each account name to the financial statement section (a-i) in which it would appear. -Gain on Sale of Equipment

Long-lived assets held for sale are classified as fixed assets.

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?

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

It is not necessary for a company to use the same depreciation method for all of its fixed assets.

For each of the following fixed assets, determine the depreciation expense for Year 3:Disposal date is N/A if asset is still in use.Method: SL = straight-line; DDB = double-declining-balanceAssume the estimated life is five years for each asset.

Match the intangible assets described with their proper classification (a-d) . ​ -Rights to sell a book and make a profit

Chasteen Company acquired mineral rights for $9,100,000. The mineral deposit is estimated at 65,000,000 tons. During the current year, 18,375,000 tons were mined and sold.? Required (a)Determine the amount of depletion expense for the current year. (b)Journalize the adjusting entry to recognize the depletion expense.

On July 1, Sterns Co. acquired patent rights for $36,000. The patent has a useful life of six years and a legal life of 15 years. Journalize the adjusting entry on December 31 to recognize the amortization.Journal $\begin{array} { | c | c | c | c | c | } \hline \text { Date } & \text { Description } & \begin{array} { c } \text { Post. } \\\text { Ref. }\end{array} & \text { Debit } & \text { Credit } \\\hline & & & & \\\hline & & & & \\\hline & & & & \\\hline\end{array}$

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?

Equipment with a cost of $160,000, an estimated residual value of $40,000, and an estimated life of 15 years was depreciated by the straight-line method for four years. Due to obsolescence, it was determined that the remaining useful life should be shortened by three years and the residual value changed to zero. The depreciation expense for the current and future years is

Which of the following should be included in the acquisition cost of a piece of equipment?

Equipment with a cost of $220,000 has an estimated residual value of $30,000 and an estimated life of 10 years or 19,000 hours. It is to be depreciated by the straight-line method. What is the amount of depreciation for the first full year, during which the equipment was used 2,100 hours?

The higher the fixed asset turnover, the

Carter Co. acquired drilling rights for $18,550,000. The oil deposit is estimated at 74,200,000 gallons. During the current year, 6,000,000 gallons were drilled. Journalize the adjusting entry at December 31 to recognize the depletion expense.Journal $\begin{array} { | c | c | c | c | c | } \hline \text { Date } & \text { Description } & \begin{array} { c } \text { Post. } \\\text { Ref. }\end{array} & \text { Debit } & \text { Credit } \\\hline & & & & \\\hline & & & & \\\hline & & & & \\\hline\end{array}$