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Exam 10: Fixed Assets and Intangible Assets

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Question 81

Multiple Choice

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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) None of the above
F) C) and D)

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Question 82

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Which intangible assets are amortized over their useful life?

A) trademarks
B) goodwill
C) patents
D) all of the above

E) None of the above
F) All of the above

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Question 83

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A new machine with a purchase price of $109,000, with transportation costs of $12,000, installation costs of $5,000, and special acquisition fees of $6,000, would have a cost basis of

When a property, plant, and equipment asset is sold for cash, any gain or loss on the asset sold should be recorded.

When exchanging equipment, if the trade-in allowance is greater than the book value a loss results.

Prepare the following journal entries and calculations:

The journal entry for recording an operating lease payment would

Though a piece of equipment is still being used, the equipment should be removed from the accounts if it has been fully depreciated.

Factors contributing to a decline in the usefulness of a fixed asset may be divided into the following two categories

On July 1, 2010, Howard Co. acquired patents rights for $40,000. The patent has a useful life of 8 years and a legal life of 15 years. Journalize the adjusting entry on December 31, 2010 to recognize the amortization. Journal

The amount of depreciation expense for a fixed asset costing $95,000, with an estimated residual value of $5,000 and a useful life of 5 years or 20,000 operating hours, is $21,375 by the units-of-production method during a period when the asset was used for 4,500 hours.

It is necessary for a company to use the same depreciation method for all of its depreciable assets.

Revising depreciation estimates does affect the amounts of depreciation expense recorded in past periods.

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. Assuming a trade-in allowance of $4,000, the cost basis of the new asset is

Fixed assets are ordinarily presented in the balance sheet

A copy machine acquired with a cost of $1,410 has an estimated useful life of 4 years. It is also expected to have a useful operating life of 13,350 copies. Assuming that it will have a residual value of $75, determine the depreciation for the first year by the

As a company records depreciation expense for a period of time a corresponding cash inflow from investing activities is reported on the statement of cash flows.

The double-declining-balance method is an accelerated depreciation method.

The amount of depreciation expense for the first full year of use of a fixed asset costing $95,000, with an estimated residual value of $5,000 and a useful life of 5 years, is $19,000 by the straight-line method.

Computer equipment (office equipment) purchased 6 1/2 years ago for $170,000, with an estimated life of 8 years and a residual value of $10,000, is now sold for $60,000 cash. (Appropriate entries for depreciation had been made for the first six years of use.) Journalize the following entries: