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Exam 9: Reporting and Interpreting Long-Lived Tangible and Intangible Assets

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Question 121

Multiple Choice

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Amortization is an adjusting entry that records the amount of:

A) intangible assets' usefulness used during the accounting period.
B) tangible assets' remaining usefulness as of the end of the accounting period.
C) the increase in value of intangible assets during the accounting period.
D) the increase in value of tangible assets during the accounting period.

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

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Question 122

Multiple Choice

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On January 11,2017,Ace Electronics bought a new cash register for $2,500.In calculating depreciation expense for the year ended December 31,2017,Ace's accountant will assume that the cash register was purchased on:

A) January 1, 2017
B) January 11, 2017
C) January 31, 2017
D) February 1, 2017

E) B) and C)
F) A) and B)

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Question 123

Multiple Choice

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What is the effect of an impairment loss on the accounting equation?

On June 22,2017,Ace Electronics sold an office building,which was not yet fully depreciated.How many months of depreciation expense should Ace record on the building for the year ended December 31,2017?

Impairment occurs when the estimated future cash flows from a long-lived asset are less than its book value.

During 2010,a company paid $1,200,000 to acquire a roller coaster.The estimated useful life of the roller coaster was estimated at ten years and its residual value was expected to be $200,000.As of December 31,2015,Accumulated Depreciation in the amount of $500,000 had been recorded on the roller coaster.Management estimates that other amusement parks and scrap dealers would currently pay $600,000 for the roller coaster. Required: Part a.Determine the asset impairment loss,if any,on the roller coaster at December 31,2015. Part b.Prepare the journal entry to record the asset impairment loss on this roller coaster as of December 31,2015.

If a truck's engine is overhauled for $8,000,the journal entry would normally include a debit to:

Company A uses an accelerated depreciation method while Company B uses the straight-line method for an asset of the same cost and useful life.Other things being equal,which of the following is correct?

The fair value of land owned by a company has increased this year.The journal entry to record this increase in fair value would include:

The book value of a depreciable asset can never be less than its:

An asset's book value or carrying value is its:

Mia Hero Shop sold its table with a book value of $1,000 for $800.Mia Hero will record:

Urban Outsiders has a building that originally cost $375,000.The company expects to be able to sell the facility for $107,000 at the end of its useful life.The balance of the related Accumulated Depreciation account is $258,000.The residual value of the facility is:

Which of the following companies (all U.S.companies except for Lego,which is a Danish company) would most likely capitalize the costs of developing a prototype?

Which of the following intangible assets has an unlimited life?

Extraordinary repairs:

Flynn Company purchased a building for $400,000.At the end of the current year,the book value of the building is $220,000 and its fair value is $180,000.Assuming the building is rented to a tenant,the sum of future cash flows from the rental of the building is expected to be $160,000.What is the amount of impairment loss?

Depreciable cost equals an asset's cost:

The right to exclude others from making or using an invention is a:

A building has a 10-year useful life and a residual value equal to 10% of the building's original cost.If the double-declining balance method is used,what depreciation rate would be used?