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Exam 9: Long-Term Assets: Fixed and Intangible

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Question 121

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On December 31, it was estimated that goodwill of $65,000 was impaired. On July 1, a patent with an estimated useful economic life of 10 years was acquired for $60,000.(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.

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(a) (b) Annual Patent Amorti...

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Question 122

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The term applied to the amount of cost to transfer to expense resulting from a decline in the utility of intangible assets is

A) amortization
B) depletion
C) depreciation
D) allocation

E) A) and B)
F) A) and C)

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Question 123

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Copy equipment was acquired at the beginning of the year at a cost of $72,000 that has an estimated residual value of $9,000 and an estimated useful life of 5 years. It is estimated that the machine will output an estimated 1,000,000 copies. This year, 315,000 copies were made. Determine the (a) depreciable cost, (b) depreciation rate, and (c) the units-of-output depreciation for the year.

A machine with a cost of $120,000 has an estimated residual value of $15,000 and an estimated life of 5 years or 15,000 hours. It is to be depreciated by the units-of-output method. What is the amount of depreciation for the second full year, during which the machine was used 5,000 hours?

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?

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. Determine the (a) depreciable cost, (b) straight-line rate, and (c) annual straight-line depreciation.

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

Classify each of the following costs associated with long-lived assets as one of the following: -Paved parking areas at new business location A)Land improvements B)Buildings C)Land D)Machinery and equipment

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.

Classify each of the following costs associated with long-lived assets as one of the following: -Freight costs paid on purchase of new equipment A)Buildings B)Machinery and equipment C)Land D)Land improvements

A machine costing $185,000 with a 5-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.

Classify each of the following as: -Fixing damage due to a car accident A)Ordinary maintenance and repairs B)Asset improvements C)Extraordinary repairs

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

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.

Patents are exclusive rights to produce and sell goods with one or more unique features.

The Bacon Company acquired new machinery with a price of $15,200 by trading in similar old machinery and paying $12,700. The old machinery originally cost $9,000 and had accumulated depreciation of $5,000. In recording this transaction, Bacon Company should record

All of the following are needed for the calculation of straight-line depreciation except

The cost of a patent with a remaining legal life of 10 years and an estimated useful life of 7 years is amortized over 10 years.

Machinery is purchased on July 1 of the current fiscal year for $240,000. It is expected to have a useful life of 4 years, or 25,000 operating hours, and a residual value of $15,000. Compute the depreciation for the last six months of the current fiscal year ending December 31 by each of the following methods: (a)straight-line (b)double-declining-balance (c)units-of-output (used for 1,600 hours during the current year)

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