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Exam 9: Long-Term Assets: Fixed and Intangible

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Question 71

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What would be the cost basis of a used machine with a purchase price of $77,000, requiring an overhaul costing $8,000, installation costs of $5,000, and special acquisition fees of $3,000?

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The cost basis of the machine ...

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Question 72

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A machine costing $57,000 with a 6-year life and $54,000 depreciable cost was purchased January 1. Compute the yearly depreciation expense using straight-line depreciation.

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$54,000 ÷ ...

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Question 73

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The higher the fixed asset turnover, the

On July 1, Hartford Construction purchases a bulldozer for $228,000. The equipment has a 9-year life with a residual value of $16,000. Hartford uses the units-of-output method of depreciation, and the bulldozer is expected to yield 26,500 operating hours. What is the depreciation expense per hour of operation?

Financial statement data for the years ended December 31 for Parker Corporation are as follows: (a) Determine the fixed asset turnover for the current and prior years.(b) Does the change in fixed asset turnover from the prior year to the current year indicate a favorable or unfavorable trend?

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.

A used machine with a purchase price of $77,000, requiring an overhaul costing $8,000, installation costs of $5,000, and special acquisition fees of $3,000, would have a cost basis of

Machinery was purchased on January 1 for $51,000. The machinery has an estimated life of 7 years and an estimated salvage value of $9,000. Double-declining-balance depreciation for the second year would be (round calculations to the nearest dollar) :

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 useful life is 5 years (instead of 4) and the residual value is $6,000, what is the amount of depreciation for the seventh year?

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.

Match the intangible assets described with their proper classification (a-d).​ -Mickey Mouse A)Patent B)Copyright C)Trademark D)Goodwill

Long-lived assets that are intangible in nature, used in the operations of the business, and not held for sale in the ordinary course of business are called fixed assets.

The double-declining-balance rate for calculating depreciation expense is determined by doubling the straight-line rate. Assuming that an asset has a useful life of 25 years, determine the rate to be used if using the double-declining-balance method.

XYZ Co. incurred the following costs related to the office building used in operating its sports supply company: Which expenditures would be classified as capital expenditures?

A lathe priced at a fair market value of $124,000 is acquired in a transaction that has commercial substance by trading in a similar lathe and paying cash for the difference between the trade-in allowance of $45,000 and the price of the new lathe. Assuming that the book value of the lathe traded in is $36,000, what is the gain or loss on the exchange?

Match the intangible assets described with their proper classification (a-d).​ -McDonald's Golden Arches A)Patent B)Copyright C)Trademark D)Goodwill

The difference between the balance in a fixed asset account and its related accumulated depreciation account is the asset's book value.

The units-of-output depreciation method provides a good match of expenses against revenue.

The following information was taken from a recent annual report of Harrison Company (in millions) :

The normal balance of the accumulated depreciation account is a debit.