Question 1

The cost of land would not include:

Accepted Answer

A)  Purchase price.
B)  Cost of parking lot lighting.
C)  Costs of removing existing structures.
D)  Fees for insuring the title.
E)  Government assessments.F) D) and E)
G) C) and D)

Question 2

If land is purchased as a building site, the cost of removing existing structures is not charged to the Land account.

Accepted Answer

A) True 
 B)False

Question 3

Explain the difference between revenue expenditures and capital expenditures and how they are recorded in the accounting system.

Accepted Answer

Revenue expenditures do not materially i...

Question 4

Beckman Enterprises purchased a depreciable asset on October 1, Year 1 at a cost of $100,000. The asset is expected to have a salvage value of $20,000 at the end of its five-year useful life. If the asset is depreciated on the double-declining-balance method, the asset's book value on December 31, Year 2 will be:

Accepted Answer

A)  $36,000
B)  $42,000
C)  $54,000
D)  $16,000
E)  $90,000F) A) and B)
G) A) and C)

Question 5

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. Determine the machines' second year depreciation under the double-declining-balance method.

Accepted Answer

A)  $16,900.
B)  $16,000.
C)  $17,400.
D)  $18,379.
E)  $20,880.F) B) and E)
G) B) and C)

Question 6

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 book value at the end of 7 years is:

Accepted Answer

A)  $2,143.
B)  $1,000.
C)  $2,000.
D)  $14,000.
E)  $0.F) All of the above
G) A) and B)

Question 7

Compare the different depreciation methods (straight-line, units-of-production, and double-declining-balance) with respect to the amounts of depreciation expense per period and the total depreciation over the life of the asset.

Accepted Answer

The amount of depreciation expense per p...

Question 8

Marlow Company purchased a point of sale system on January 1 for $3,400. This system has a useful life of 10 years and a salvage value of $400. What would be the accumulated depreciation at the end of the second year of its useful life using the double-declining-balance method?

Accepted Answer

A)  $2,176.
B)  $544.
C)  $1,200.
D)  $600.
E)  $1,224.F) B) and E)
G) None of the above

Question 9

The term, obsolescence, as it relates to the useful life of an asset, refers to:

Accepted Answer

A)  The end of an asset's useful life.
B)  A plant asset that is no longer useful in producing goods and services with a competitive advantage.
C)  The insufficient capacity of a company's plant assets to meet the company's productive demands.
D)  An asset's salvage value becoming less than its replacement cost.
E)  Intangible assets that have been fully amortized.F) B) and D)
G) A) and D)

Question 10

Asset turnover is computed by dividing net sales by average total assets.

Accepted Answer

A) True 
 B)False

Question 11

Explain the impact, if any, on depreciation when estimates that determine depreciation change.

Accepted Answer

Depreciation is revised when changes in ...

Exam 8: Accounting for Long-Term Assets

Compare the different depreciation methods (straight-line, units-of-production, and double-declining-balance) with respect to the amounts of depreciation expense per period and the total depreciation over the life of the asset.

Correct Answer
verified
The amount of depreciation expense per p...
View Answer

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 book value at the end of 7 years is:

Correct Answer
verified

Explain the difference between revenue expenditures and capital expenditures and how they are recorded in the accounting system.

Correct Answer
verified
Revenue expenditures do not materially i...
View Answer

Asset turnover is computed by dividing net sales by average total assets.

Correct Answer
verified

Marlow Company purchased a point of sale system on January 1 for $3,400. This system has a useful life of 10 years and a salvage value of $400. What would be the accumulated depreciation at the end of the second year of its useful life using the double-declining-balance method?

Correct Answer
verified

Correct Answer
verified

The term, obsolescence, as it relates to the useful life of an asset, refers to:

Correct Answer
verified

If land is purchased as a building site, the cost of removing existing structures is not charged to the Land account.

Correct Answer
verified

Correct Answer
verified

Explain the impact, if any, on depreciation when estimates that determine depreciation change.

Correct Answer
verified
Depreciation is revised when changes in ...
View Answer

The cost of land would not include:

Correct Answer
verified

Exam 8: Accounting for Long-Term Assets

Compare the different depreciation methods (straight-line, units-of-production, and double-declining-balance) with respect to the amounts of depreciation expense per period and the total depreciation over the life of the asset.

Correct AnswerverifiedThe amount of depreciation expense per p...View AnswerShow Answer

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 book value at the end of 7 years is:

Correct AnswerverifiedShow Answer

Explain the difference between revenue expenditures and capital expenditures and how they are recorded in the accounting system.

Correct AnswerverifiedRevenue expenditures do not materially i...View AnswerShow Answer

Asset turnover is computed by dividing net sales by average total assets.

Correct AnswerverifiedShow Answer

Marlow Company purchased a point of sale system on January 1 for $3,400. This system has a useful life of 10 years and a salvage value of $400. What would be the accumulated depreciation at the end of the second year of its useful life using the double-declining-balance method?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The term, obsolescence, as it relates to the useful life of an asset, refers to:

Correct AnswerverifiedShow Answer

If land is purchased as a building site, the cost of removing existing structures is not charged to the Land account.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Explain the impact, if any, on depreciation when estimates that determine depreciation change.

Correct AnswerverifiedDepreciation is revised when changes in ...View AnswerShow Answer

The cost of land would not include:

Correct AnswerverifiedShow Answer

Correct Answer
verified
The amount of depreciation expense per p...
View Answer

Correct Answer
verified

Correct Answer
verified
Revenue expenditures do not materially i...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Depreciation is revised when changes in ...
View Answer

Correct Answer
verified