Exam 3 Prep: Chp 9 #1

A characteristic of a fixed asset

Which of the following should be included in the acquisition cost of a piece of equipment? testing costs prior to placing the equipment into production transportation costs installation costs All of these choices are correct.

Which of the following is included in the cost of constructing a building? cost of repairing vandalism damage during construction insurance costs during construction cost of removing the demolished building existing on the land when it was purchased cost of paving the parking lot

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 of

A used machine with a purchase price of $32,023.00, requiring an overhaul costing $9,642.00, installation costs of $6,997.00, and special acquisition fees of $7,194.00, would have a cost basis of

A new machine with a purchase price of $109,000, with transportation costs of $12,000, installation costs of $5,000, and special acquisition fees of $6,000, would have a cost basis of

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

A capital expenditure results in a debit to

Which of the following below is an example of a capital expenditure? replacing all burned-out light bulbs in the factory replacing an engine in a company car cleaning the carpet in the front room tune-up for a company truck

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

Factors contributing to a decline in the usefulness of a fixed asset may be divided into the following two categories

A fixed asset's estimated value at the time it is to be retired from 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?

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

If a fixed asset, such as a computer, were purchased on January 1st for $1,935.00 with an estimated life of 6 years and a salvage or residual value of $238.00, what is the journal entry for monthly expense under straight-line depreciation?

The proper journal entry to purchase a computer costing $975 on account to be utilized within the business would be

Residual value is also known as all of the following except

The formula for depreciable cost is

Expected useful life is

The calculation for annual depreciation using the straight-line depreciation method 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, which ends on December 31. Using straight-line depreciation, calculate depreciation expense for the final (partial) year of service.

On June 1, Michael 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 second year.

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, which ends on December 31.

Computer equipment was acquired at the beginning of the year at a cost of $57,000 that has an estimated residual value of $9,000 and an estimated useful life of 5 years. Determine the second-year depreciation using the straight-line method.

Computer equipment was acquired at the beginning of the year at a cost of $64,629.00. The computer equipment has an estimated residual value of $2,384.00 and an estimated useful life of 7 years. Determine the 2nd year's depreciation using straight-line depreciation.

Which of the following is true?

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

Sands Company purchased mining rights for $500,000. They expect to harvest 1 million tons of ore over the next five years. During the current year, Sands mined 350,000 tons of ore. The entry to record the depletion would include

The natural resources of some companies include

Expenditures for research and development are generally recorded as

Fixed assets are ordinarily presented on the balance sheet

A fixed asset with a cost of $30,000 and accumulated depreciation of $28,500 is sold for $3,500. What is the amount of the gain or loss on disposal of the fixed asset?

A fixed asset with a cost of $26,180.00 and accumulated depreciation of $23,562.00 is sold for $4,450.60. What is the amount of the gain or loss on disposal of the fixed asset?

When a company sells machinery at a price equal to its book value, this transaction would be recorded with an entry that would include the following:

On December 31, Strike Company has decided to discard one of its batting cages. The equipment had an initial cost of $310,000 and has accumulated depreciation of $260,000. Depreciation has been recorded up to the end of the year. Which of the following will be included in the entry to record the disposal?

On December 31, Strike Company sold one of its batting cages for $50,000. The equipment had an original cost of $310,000 and has accumulated depreciation of $260,000. Depreciation has been recorded up to the end of the year. What is the amount of the gain or loss on this transaction?

On December 31, Strike Company has decided to sell one of its batting cages. The initial cost of the equipment was $298,063.00 with an accumulated depreciation of $283,159.85. Depreciation has been taken up to the end of the year. The company found a company that is willing to buy the equipment for $34,277.25. What is the amount of the gain or loss on this transaction?

On December 31, Strike Company sold one of its batting cages for $20,000. The equipment had an initial cost of $310,000 and had accumulated depreciation of $260,000. Depreciation has been recorded up to the end of the year. What is the amount of the gain or loss on this transaction?

On December 31, Strike Company has decided to sell one of its batting cages. The initial cost of the equipment was $264,153.00 with an accumulated depreciation of $237,737.70. Depreciation has been taken up to the end of the year. The company found a company that is willing to buy the equipment for $23,773.77. What is the amount of the gain or loss on this transaction?