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Exam 9: Long-Term Assets: Fixed and Intangible

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Question 91

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On July 1, Sterns Co. acquired patent rights for $36,000. The patent has a useful life of 6 years and a legal life of 15 years. Journalize the adjusting entry on December 31 to recognize the amortization. Journal $\begin{array} { | c | c | c | c | c | } \hline \text { Date } & \text { Description } & \begin{array} { c } \text { Post. } \\\text { Ref. }\end{array} & \text { Debit } & \text { Credit } \\\hline & & & & \\\hline & & & & \\\hline & & & & \\\hline\end{array}$

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Journal _TB2281_00 Annual Pate...

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Question 92

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Match the intangible assets described with their proper classification (a-d) . -Nike swoosh

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

E) All of the above
F) A) and B)

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Question 93

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Computer equipment was acquired at the beginning of the year at a cost of $63,000 that has an estimated residual value of $3,000 and an estimated useful life of 5 years. Determine the (a) depreciable cost (b) double-declining-balance rate, and (c) double-declining-balance depreciation for the first year.

On December 31, Bowman Company estimated that goodwill of $80,000 was impaired. On June 1, a patent with an estimated useful economic life of 10 years was acquired for $252,000. ​ Required: (a) Journalize the adjusting entry on December 31 for the impaired goodwill. (b) Journalize the adjusting entry on December 31 for the amortization of the patent rights.

Classify each of the following as: -Resurfacing a pool in an apartment building

The name, term, or symbol used to identify a business and its products is called

The Weber Company purchased a mining site for $1,600,000 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. During the first year, the company extracted 6,500 tons of ore. The depletion expense is

Equipment costing $80,000 with a useful life of 10 years and a residual value of $8,000 has been depreciated for 6 years by the straight-line method. Assume a fiscal year ending December 31. (a) What is the book value at the end of the sixth year of use? (b) If early in the seventh year it is estimated that the remaining usefull life is 5 years (instead of 4 ) and the residual value is $\$ 6,000$ , what is the amount of depreciation for the seventh year?

Convert each of the following estimates of useful life to a straight-line depreciation rate, stated as a percentage. (a) 2 years (b) 8 years (c) 10 years (d) 20 years (e) 25 years (f) 40 years (g) 50 years

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 8 years. What is the annual straight-line depreciation for the equipment?

Classify each of the following costs associated with long-lived assets as one of the following: -Modifying a building purchased for new business location

The depreciable cost of a building is the same as its acquisition cost.

Which of the following statements is true?

The formula for depreciable cost is

Classify each of the following costs associated with long-lived assets as one of the following: -Cost assessed by city for paving a public street that borders land on which a new business location will be constructed

Expected useful life is

Champion Company purchased and installed carpet in its new general offices on March 31 for a total cost of $18,000. The carpet is estimated to have a 15-year useful life and no residual value. ​ (a) Prepare the journal entries necessary for recording the purchase of the new carpet. (b) Record the December 31 adjusting entry for the partial-year depreciation expense for the carpet assuming that Champion Company uses the straight-line method.

Computer equipment was acquired at the beginning of the year at a cost of $57,000 that has an estimated residual value of $9,000 and an estimated useful life of 5 years. Determine the second-year depreciation using the straight-line method.

Classify each of the following as: -New landscaping

An asset was purchased for $120,000 on January 1, Year 1 and originally estimated to have a useful life of 10 years with a residual value of $10,000. At the beginning of the third year, it was determined that the remaining useful life of the asset was only 4 years with a residual value of $2,000. Calculate the third-year depreciation expense using the revised amounts and straight-line method.