Chapter 9 ACCT Notes

Which of the following should be included in the acquisition cost of a piece of equipment?

Which of the following is included in the cost of land?

Accumulated Depreciation

A building with an appraisal value of $154,000 is made available at an offer price of $172,000. The purchaser acquires the property for $40,000 in cash, a 90-day note payable for $45,000, and a mortgage amounting to $75,000. The cost basis recorded in the buyer's accounting records to recognize this purchase is

A used machine with a purchase price of $77,000, requiring an overhaul costing $8,000, installation costs of $5,000, and special acquisition fees of $3,000, would have a cost basis o

Expenditures that add to the utility of fixed assets for more than one accounting period are

A capital expenditure results in a debit to

The journal entry for recording payment for the short-term lease of a fixed asset would

Which of the following are criteria for determining whether to record an asset as a fixed asset?

A fixed asset's estimated value at the time it is to be retired form service is called

All of the following are needed for the calculation of straight-line depreciation except

Equipment with a cost of $220,000 has an estimated residual value of $30,000 and an estimated life of 10 years or 19,000 hours. It is to be depreciated by the straight-line method. What is the amount of depreciation for the first full year, during which the equipment was used 2,100 hours?

A machine with a cost of $75,000 has an estimated residual value of $5,000 and an estimated life of 4 years or 18,000 hours. What is the amount of depreciation for the second full year, using the double-declining-balance method?

The most widely used depreciation method is

Equipment with a cost of $160,000, an estimated residual value of $40,000, and an estimated life of 15 years was depreciated by the straight-line method for 4 years. Due to obsolescence, it was determined that the useful life should be shortened by 3 years and the residual value changed to zero. The depreciation expense for the current and future years is

The depreciation method that does not use residual value in calculating the first year's depreciation expense is

If a fixed asset, such as a computer, were purchased on January 1 for $3,750 with an estimated life of 3 years and a salvage or residual value of $150, the journal entry for monthly expense under straight-line depreciation is

The formula for depreciable cost is

Expected useful life is

On June 1, Aaron Company purchased equipment at a cost of $120,000 that has a depreciable cost of $90,000 and an estimated useful life of 3 years and 30,000 hours. Using straight-line depreciation, calculate depreciation expense for the final (partial) year of service.

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 3 years or 30,000 hours. Using straight-line depreciation, calculate depreciation expense for the first year.

The process of transferring the cost of metal ores and other minerals removed from the earth to an expense account is called

Expenditures for research and development are generally recorded as

The term applied to the amount of cost to transfer to expense resulting from a decline in the utility of intangible assets is

Xtra Company purchased a business from Argus for $96,000 above the fair value of its net assets. Argus had developed the goodwill over 12 years. How much would Xtra amortize the goodwill for its first year?

Fixed assets are ordinarily presented on the balance sheet

A fixed asset with a cost of $52,000 and accumulated depreciation of $47,500 is traded for a similar asset priced at $60,000 (fair market value) in a transaction with commercial substance. Assuming a trade-in allowance of $5,000, at what cost will the new equipment be recorded in the books?

A fixed asset with a cost of $41,000 and accumulated depreciation of $36,500 is traded for a similar asset priced at $60,000. Assuming a trade-in allowance of $3,000, the recognized loss on the trade is

When a company discards machinery that is fully depreciated, this transaction would be recorded with the following entry