FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 8: Accounting for Long-Term Assets

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 51

Multiple Choice

Review LaterAdd Note

Review Later

A company discarded a computer system originally purchased for $18,000. The accumulated depreciation was $17,200. The company should recognize a(an) :

A) $0 gain or loss.
B) $800 loss.
C) $800 gain.
D) $8,000 loss.
E) $7,200 loss.

F) C) and D)
G) B) and C)

Correct Answer

verified

Show Answer

Question 52

Multiple Choice

Review LaterAdd Note

Review Later

Victory Company purchases office equipment at the beginning of the year at a cost of $15,000. The machine's useful life is estimated to be 7 years with a $1,000 salvage value. The journal entry to record the first year depreciation is:

A) Debit Depreciation Expense $2,143; credit Accumulated Depreciation $2,143.
B) Debit Depreciation Expense $2,000; credit Office Equipment $2,000.
C) Debit Office Equipment $2,000; credit Accumulated Depreciation $2,000.
D) Debit Accumulated Depreciation $2,143; credit Office Equipment $2,143.
E) Debit Depreciation Expense $2,000; credit Accumulated Depreciation $2,000.Depreciation Expense = ($15,000 - $1,000) /7 = $2,000

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

Correct Answer

verified

Show Answer

Question 53

Multiple Choice

Review LaterAdd Note

The relevant factors in computing depreciation do not include:

Phoenix Agency leases office space for $7,000 per month. On January 3, Phoenix incurs $65,000 to improve the leased office space. These improvements are expected to yield benefits for 8 years. Phoenix has 5 years remaining on its lease. Compute the amount of expense that should be recorded the first year related to the improvements.

Revenue expenditures are also called balance sheet expenditures.

Plant assets refer to nonphysical assets that are used in the operations of a business.

Depreciation does not measure the decline in market value of an asset each period.

Describe the accounting for intangible assets, including their acquisition, cost allocation, and accounts involved.

Depreciation:

The formula to compute annual straight-line depreciation is:

Minor Company installs a machine in its factory at the beginning of the year at a cost of $135,000. The machine's useful life is estimated to be 5 years, or 300,000 units of product, with a $15,000 salvage value. During its first year, the machine produces 64,500 units of product. Determine the machines' first year depreciation under the straight-line method.

A company bought new heating system for $42,000 and was given a trade-in of $2,000 on an old heating system, so the company paid $40,000 cash with the trade-in. The old system had an original cost of $37,000 and accumulated depreciation of $34,000. If the transaction has commercial substance, the company should record the new heating system at:

When a company constructs a building, the cost of the building includes materials and labor but not design fees, building permits, or insurance during construction.

Wickland Company installs a manufacturing machine in its production facility at the beginning of the year at a cost of $87,000. The machine's useful life is estimated to be 5 years, or 400,000 units of product, with a $7,000 salvage value. During its second year, the machine produces 84,500 units of product. What journal entry would be needed to record the machines' second year depreciation under the units-of-production method?

What are the general accounting procedures for recording asset disposals?

The purchase of a property that included land, building, and related improvements is called a lump-sum or basket purchase.

Cliff Company traded in an old truck for a new one. The old truck had a cost of $75,000 and accumulated depreciation of $60,000. The new truck had an invoice price of $125,000. Huffington was given a $12,000 trade-in allowance on the old truck, which meant they paid $113,000 in addition to the old truck to acquire the new truck. If this transaction has commercial substance, what is the recorded value of the new truck?

A company had average total assets of $887,000. Its gross sales were $1,090,000 and its net sales were $1,000,000. The company's total asset turnover equals:

Salvage value is an estimate of an asset's value at the end of its benefit period.

Land improvements are: