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Exam 10: Long-Term Assets: Fixed and Intangible

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Question 71

Multiple Choice

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In a lease contract,the party who legally owns the asset is the

A) lessee
B) lessor
C) operator
D) banker

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Question 72

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Long-lived assets held for sale are classified as fixed assets.

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Question 73

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Convert each of the following estimates of useful life to a straight-line depreciation rate,stated as a percentage.

When land is purchased to construct a new building,the cost of removing any structures on the land should be charged to the building account.

Classify each of the following as: -Exterior and interior painting

The higher the fixed asset turnover,the

The calculation for annual depreciation using the units-of-activity method is

Functional depreciation occurs when a fixed asset is no longer able to provide services at the level for which it was intended.

On July 1,Harding Construction purchases a bulldozer for $228,000.The equipment has an eight-year life with a residual value of $16,000.Harding uses straight-line depreciation. (a)Calculate the depreciation expense and provide the journal entry for the first year ending December 31. (b)Calculate the third year's depreciation expense and provide the journal entry for the third year endingDecember 31. (c)Calculate the last year's depreciation expense and provide the journal entry for the last year.

When old equipment is traded in for a new equipment,the difference between the list price and the trade-in allowance is called boot.

Classify each of the following costs associated with long-lived assets as one of the following: -Costs of government permits required to develop land for a new business location

Identify the following as a fixed asset (FA),or intangible asset (IA),natural resource (NR),or none of these (N).​

On June 1,Scotter Company purchased equipment at a cost of $120,000 that has a depreciable cost of $90,000 and an estimated useful life of three years or 30,000 hours.​Using straight-line depreciation,calculate depreciation expense for the first year,which ends on December 31.

Solare Company acquired mineral rights for $60,000,000.The diamond deposit is estimated at 6,000,000 tons.During the current year,2,300,000 tons were mined and sold.

A copy machine acquired with a cost of $1,410 has an estimated useful life of four 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 following methods:​

For each of the following fixed assets,determine the depreciation expense for Year 3:Disposal date is N/A if asset is still in use.Method: SL = straight-line; DDB = double-declining-balanceAssume the estimated life is five years for each asset.

It is not necessary for a company to use the same depreciation method for all of its fixed assets.

The ratio measuring the number of dollars of sales earned per dollar of fixed assets is the

Classify each of the following as: -Paving a new parking lot

Which of the following is an example of a capital expenditure?