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Exam 9: Fixed Assets and Intangible Assets

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Question 71

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Journalize each of the following transactions:

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Question 72

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Equipment acquired at a cost of $126,000 has a book value of $42,000. Journalize the disposal of the equipment under the following independent assumptions.

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Question 73

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A fixed asset with a cost of $30,000 and accumulated depreciation of $28,500 is sold for $3,500. What is the amount of the gain or loss on disposal of the fixed asset?

Falcon Company acquired an adjacent lot to construct a new warehouse, paying $40,000 and giving a short-term note for $410,000. Legal fees paid were $13,275, delinquent taxes assessed were $14,500, and fees paid to remove an old building from the land were $15,800. Materials salvaged from the demolition of the building were sold for $6,800. A contractor was paid $890,000 to construct a new warehouse. Determine the cost of the land to be reported on the balance sheet and show your work.

When minor errors occur in the estimates used in the determination of depreciation, the amounts recorded for depreciation expense in the past should be corrected.

Which intangible assets are amortized over their useful life?

When a company establishes an outstanding reputation and has a competitive advantage because of it, the company should record goodwill on its financial statements.

A characteristic of a fixed asset is that it is

The most widely used depreciation method is

The cost of computer equipment does not include the consultant's fee to supervise installation of the equipment.

The formula for depreciable cost is

The journal entry for recording an operating lease payment would

An estimate of the amount which an asset can be sold at the end of its useful life is called residual value.

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?

A fixed asset's estimated value at the time it is to be retired from service is called

Which of the following is included in the cost of land?

When a plant asset is traded for another similar asset, losses on the asset traded are not recognized.

Expected useful life is

The transfer to expense of the cost of intangible assets attributed to the passage of time or decline in usefulness is called amortization.

On July 1st, 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 31st. (b) Calculate the third year's depreciation expense and provide the journal entry for the third year ending December 31st. (c) Calculate the last year's depreciation expense and provide the journal entry for the last year.