FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 7: Long-Term Assets

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 71

True/False

Review LaterAdd Note

Review Later

Intangible assets with an indefinite useful life (goodwill and most trademarks)are not amortized.

A) True
B) False

Correct Answer

verified

Show Answer

Question 72

Multiple Choice

Review LaterAdd Note

Review Later

Alliance Products purchased equipment that cost $120,000.It had an estimated useful life of four years and no residual value.The equipment was depreciated by the straight-line method and was sold at the end of the third year of use for $25,000 cash.Alliance should record:

A) A gain of $5,000.
B) A loss of $5,000.
C) Neither a gain nor a loss since the computer was sold at its book value.

D) A) and B)
E) All of the above

Correct Answer

verified

Show Answer

Question 73

Multiple Choice

Review LaterAdd Note

Which of the following intangible assets is not amortized?

A copyright is an exclusive right of protection given to the creator of a published work such as a song,film,painting,photograph,book,or computer software.

Kansas Enterprises purchased equipment for $60,000 on January 1,2018.The equipment is expected to have a five-year life,with a residual value of $5,000 at the end of five years.Using the straight-line method,depreciation expense for 2018 would be:

If a firm successfully defends an intangible right,it should expense the litigation costs as incurred.If a firm successfully defends an intangible right,it should capitalize the litigation costs and amortize them over the remaining useful life of the related intangible.

The following financial information is from Cook Company: What is the total amount of property,plant,and equipment assuming the accounts above reflect normal activity? $\begin{array} { | l | r | } \hline \text { Accounts Payable } & \$ 55,000 \\\hline \text { Land } & \$ 90,000 \\\hline \text { Inventory } & \$ 10,500 \\\hline \text { Accounts Receivable } & \$ 7,500 \\\hline \text { Equipment } & \$ 8,000 \\\hline \text { Deferred Revenue } & \$ 58,500 \\\hline \text { Short-term Investments } & \$ 20,000 \\\hline \text { Notes Receivable (due in 8 months) } & \$ 45,500 \\\hline \text { Interest Payable } & \$ 2,000 \\\hline \text { Patents } & \$ 75,000 \\\hline\end{array}$

The balance sheet of Purdy's BBQ reports total assets of $800,000 and $900,000 at the beginning and end of the year,respectively.Net income and sales for the year are $85,000 and $1,700,000,respectively.What is Purdy's profit margin?

Wilson Inc.owns equipment for which it originally paid $70 million and has recorded accumulated depreciation on the equipment of $12 million.Due to adverse economic conditions,Wilson's management determined that it should assess whether an impairment should be recognized for the equipment.The estimated future cash flows to be provided by the equipment total $60 million,and its fair value at that point totals $50 million.Under these circumstances,Wilson:

Bad Brads BBQ purchased a piece of equipment by paying $5,000 cash.They also incurred a shipping cost of $400 to get the equipment to its factory.The fair value of this equipment is $7,000.For what amount should Bad Brads BBQ record the equipment?

Management must review long-term assets for impairment when events or changes in circumstances indicate that book value might not be recoverable.

We record a gain if we sell an asset for less than book value.We record a gain if we sell an asset for more than book value.

Which of the following subsequent expenditures would not be capitalized?

The balance sheet of Hidden Valley Farms reports total assets of $450,000 and $550,000 at the beginning and end of the year,respectively.The return on assets for the year is 10%.What is Hidden Valley's net income for the year?

Which of the following subsequent expenditures would be capitalized?

Kansas Enterprises purchased equipment for $60,000 on January 1,2018.The equipment is expected to have a five-year life,with a residual value of $5,000 at the end of five years.Using the double-declining balance method,depreciation expense for 2019 would be:

We record a long-term asset at its cost less all expenditures necessary to get the asset ready for use.We record a long-term asset at its cost plus all expenditures necessary to get the asset ready for use.

Productive assets that are physically used up or depleted are:

Depreciation in accounting is the process of allocating to expense the cost of an asset over its service life.

Aspen,Inc.developed a new horse transport device and incurred research and development costs of $250,000.Rather than continue with their own research,Aspen decided to purchase a patent for a similar design from Vail,Inc.for $350,000.What are the total assets and expenses for these developments?