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Exam 9: Reporting and Analyzing Long-Lived Assets

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Question 61

Multiple Choice

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The diminishing-balance method of depreciation produces a(n)

A) decreasing depreciation expense each period.
B) increasing depreciation expense each period.
C) diminishing percentage rate each period.
D) constant amount of depreciation expense each period.

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Question 62

Multiple Choice

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Research costs

A) are classified as intangible assets.
B) must be expensed when incurred.
C) should be included in the cost of the asset they relate to.
D) are capitalized and then amortized over their estimated useful life.

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Question 63

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Copyrights are granted by the Canadian Intellectual Property Office

Which of the following is not an advantage of an operating lease?

The carrying amount of property, plant, and equipment is always equal to its fair value.

Units-of-production is an appropriate depreciation method to use when

On the statement of cash flows, cash flows from the purchase and sale of long-lived assets are shown in which section?

If a trademark is developed internally, it cannot be recognized as an intangible asset on the statement of financial position.

When purchasing land, the costs for clearing, draining, filling, and grading should be charged to a Land Improvements account.

Depreciation is a process of

Equipment with a cost of $160,000, an estimated residual value of $10,000, and an estimated life of 4 years, was purchased on April 1, 2012. If the straight-line method is used, the depreciation expense for calendar 2012 is

If land is purchased with a building on it that is to be demolished, proceeds from any salvaged materials are reported as Other Revenue in the income statement.

Intangible assets are the rights and privileges that result from ownership of assets that

On July 1, 2012, Happy Hound Kennels Inc. sells equipment for $20,000. The equipment originally cost $80,000, had an estimated 5-year life and an expected residual value of $10,000. The Accumulated Depreciation account had a balance of $49,000 on January 1, 2012, using the straight-line method. The gain or loss on disposal is

Tran Inc purchased equipment for $48,000, and estimated that the equipment will have a $4,000 residual value at the end of its 8-year useful life. Using the double diminishing-balance method, the depreciation expense for the third year would be

On January 1, 2012, a machine with a useful life of five years and a residual value of $2,500 was purchased for $25,000. Using the double diminishing-balance method, the depreciation expense for the year ending December 31, 2013 would be

Which of the following is not a consideration when calculating depreciation?

The difference between a depreciable asset's cost and its residual value is called

Which of the following statements is not true?

Use the following information for questions On January 1, 2011, Flowers Unlimited purchased a new delivery van. The van cost $35,000 with an estimated life of 5 years and $5,000 residual value. Double diminishing-balance depreciation will be used. -What is the balance in the Accumulated Depreciation account at the end of 2012?