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Exam 9: Long-Term Assets: Fixed and Intangible

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Question 81

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In a lease contract,the party who legally owns the asset is the

A) lessee
B) lessor
C) operator
D) banker

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

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Question 82

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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

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Journal Annual Patent Amortiza...

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Question 83

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The amount of the depreciation expense for the second full year of use of a fixed asset costing $100,000,with an estimated residual value of $5,000 and a useful life of 4 years,is $25,000 by the double-declining-balance method.

The cost of replacing an engine in a truck is an example of ordinary maintenance.

A gain can be realized when a fixed asset is discarded.

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

An asset was purchased for $58,000 and originally estimated to have a useful life of 10 years with a residual value of $3,000.After two years of straight-line depreciation,it was determined that the remaining useful life of the asset was only 2 years with a residual value of $2,000. (a)Determine the amount of the annual depreciation for the first two years. (b)Determine the book value at the end of Year 2. (c)Determine the depreciation expense for each of the remaining years after revision.

What is the cost of the land,based upon the following data?

A fixed asset with a cost of $41,000 and accumulated depreciation of $36,500 is traded for a similar asset priced at $60,000.Assuming a trade-in allowance of $3,000,the recognized loss on the trade is

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.

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

When old equipment is traded in for a new equipment,the difference between the list price and the trade in allowance is called boot.

On July 1,Andrew Company purchased equipment at a cost of $150,000 that has a depreciable cost of $120,000 and an estimated useful life of 3 years or 60,000 hours. ​ Using straight-line depreciation,prepare the journal entry to record depreciation expense for (a)the first year,(b)the second year,and (c)the last year.

Costs associated with normal research and development activities should be treated as intangible assets.

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

On July 1,Harding Construction purchases a bulldozer for $228,000.The equipment has a 8-year life with a residual value of $16,000.Harding uses straight-line depreciation. ​(a)Calculate the depreciation expense and provide the journal entry for the first year ending December 31. ​(b)Calculate the third year's depreciation expense and provide the journal entry for the third year ending December 31. ​(c)Calculate the last year's depreciation expense and provide the journal entry for the last year.

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.

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

On June 1,Scotter 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 first year,which ends on December 31.

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 balance Assume the estimated life is 5 years for each asset.