Question 1

Purrfect Pets has a facility that originally cost $375,000.The balance of the accumulated amortization account for the facility is $258,000.The company expects to be able to sell the facility for $107,000 at the end of its useful life.The amortizable cost of the facility is:

Accepted Answer

A)  $117,000.
B)  $151,000.
C)  $268,000.
D)  $107,000E) A) and B)
F) A) and C)

Question 2

How will the costs of an intangible asset being develop internally or self-constructed be reported?

Accepted Answer

A)  As capital expenditure
B)  As research and development expenses
C)  As marketing expenses
D)  As a liabilityE) None of the above
F) A) and B)

Question 3

The book or carrying value of an asset is:

Accepted Answer

A)  its acquisition cost less the accumulated amortization from the acquisition date to the balance sheet date.
B)  its acquisition cost plus accumulated amortization from the acquisition date to the balance sheet date.
C)  the amount that could be obtained for the asset on the balance sheet date if it were sold.
D)  the annual cost of carrying the asset in inventory.E) None of the above
F) A) and B)

Question 4

?

Accepted Answer

A)  $21,600
B)  $22,000
C)  $22,400
D)  $34,000E) C) and D)
F) A) and D)

Question 5

Long-lived assets are assets that are intended for resale.
BT: Knowledge

Accepted Answer

The answer of Long-lived assets are assets that are intended...

Question 6

Research and development costs are treated as a capital expenditure.
BT: Knowledge

Accepted Answer

A) True 
 B)False

Question 7

A book manufacturing company sells equipment for $450,000 when the book value of the equipment is $400,000.The company would record the extra $50,000 as:

Accepted Answer

A)  a gain,increasing net income and shareholders' equity.
B)  revenue,increasing net income and shareholders' equity.
C)  cash,increasing assets and shareholders' equity.
D)  accumulated amortization,increasing assets and shareholders' equity.E) B) and C)
F) All of the above

Question 8

The Widget Tool and Die Company buys a $400,000 stamping machine that has an estimated residual value of $20,000.The company expects the machine to produce two million units.It makes 400,000 units during the current period.If the units-of-production method is used,the amortization rate is:

Accepted Answer

A)  $0.95 per unit.
B)  $0.19 per unit.
C)  $0.05 per unit.
D)  $1.00 per unit.E) A) and D)
F) A) and C)

Question 9

A company sells a piece of equipment half-way through the accounting period.The straight-line rate of amortization on the equipment is $40,000 a year.Before recording the asset sale,the company should debit:

Accepted Answer

A)  amortization expense for $40,000 and credit long-lived assets for $40,000.
B)  accumulated amortization for $40,000 and credit cash for $40,000.
C)  amortization expense for $20,000 and credit accumulated amortization for $20,000.
D)  cash for $20,000 and credit amortization expense for $20,000.E) C) and D)
F) B) and C)

Question 10

Assuming no additions,replacements,or extraordinary repairs,the carrying value of a long-lived asset is never more than its original cost.
BT: Comprehension

Accepted Answer

A) True 
 B)False

Question 11

Company A uses an accelerated amortization 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 true?

Accepted Answer

A)  Company A will have higher net income in the early years but Company B will have higher net income towards the end of the asset's useful life.
B)  Company A will consistently have the larger net income until residual value is reached.
C)  Company B will have higher net income in the early years but Company A will have higher net income towards the end of the asset's useful life.
D)  Company B will consistently have the larger net income until residual value is reached.E) A) and B)
F) C) and D)

Question 12

Recall that the Fixed Asset Turnover Ratio equals Net Sales Revenue divided by Average Net Fixed Assets.Assume that,prior to preparing adjusting entries at the end of the year,Caterpillar Corporation has a fixed asset turnover ratio of 3.4 based on average net fixed assets of $500,000,000.Which of the following year-end adjustments would cause Caterpillar's fixed asset turnover ratio to increase?

Accepted Answer

A)  Caterpillar accrues and capitalizes $50,000 of interest for self-constructed assets.
B)  Caterpillar accrues a liability for ordinary repair costs in the amount of $50,000.
C)  Caterpillar writes-down an impaired piece of equipment by $50,000.
D)  None of the above.E) None of the above
F) A) and B)

Exam 9: Long-Lived Tangible and Intangible Assets

Long-lived assets are assets that are intended for resale. BT: Knowledge

Correct Answer
verified

Research and development costs are treated as a capital expenditure. BT: Knowledge

Correct Answer
verified

Purrfect Pets has a facility that originally cost $375,000.The balance of the accumulated amortization account for the facility is $258,000.The company expects to be able to sell the facility for $107,000 at the end of its useful life.The amortizable cost of the facility is:

Correct Answer
verified

A company sells a piece of equipment half-way through the accounting period.The straight-line rate of amortization on the equipment is $40,000 a year.Before recording the asset sale,the company should debit:

Correct Answer
verified

Assuming no additions,replacements,or extraordinary repairs,the carrying value of a long-lived asset is never more than its original cost. BT: Comprehension

Correct Answer
verified

The Widget Tool and Die Company buys a $400,000 stamping machine that has an estimated residual value of $20,000.The company expects the machine to produce two million units.It makes 400,000 units during the current period.If the units-of-production method is used,the amortization rate is:

Correct Answer
verified

?

Correct Answer
verified

Company A uses an accelerated amortization 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 true?

Correct Answer
verified

A book manufacturing company sells equipment for $450,000 when the book value of the equipment is $400,000.The company would record the extra $50,000 as:

Correct Answer
verified

The book or carrying value of an asset is:

Correct Answer
verified

How will the costs of an intangible asset being develop internally or self-constructed be reported?

Correct Answer
verified

Correct Answer
verified

Exam 9: Long-Lived Tangible and Intangible Assets

Long-lived assets are assets that are intended for resale. BT: Knowledge

Correct AnswerverifiedShow Answer

Research and development costs are treated as a capital expenditure. BT: Knowledge

Correct AnswerverifiedShow Answer

Purrfect Pets has a facility that originally cost $375,000.The balance of the accumulated amortization account for the facility is $258,000.The company expects to be able to sell the facility for $107,000 at the end of its useful life.The amortizable cost of the facility is:

Correct AnswerverifiedShow Answer

A company sells a piece of equipment half-way through the accounting period.The straight-line rate of amortization on the equipment is $40,000 a year.Before recording the asset sale,the company should debit:

Correct AnswerverifiedShow Answer

Assuming no additions,replacements,or extraordinary repairs,the carrying value of a long-lived asset is never more than its original cost. BT: Comprehension

Correct AnswerverifiedShow Answer

The Widget Tool and Die Company buys a $400,000 stamping machine that has an estimated residual value of $20,000.The company expects the machine to produce two million units.It makes 400,000 units during the current period.If the units-of-production method is used,the amortization rate is:

Correct AnswerverifiedShow Answer

?

Correct AnswerverifiedShow Answer

Company A uses an accelerated amortization 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 true?

Correct AnswerverifiedShow Answer

A book manufacturing company sells equipment for $450,000 when the book value of the equipment is $400,000.The company would record the extra $50,000 as:

Correct AnswerverifiedShow Answer

The book or carrying value of an asset is:

Correct AnswerverifiedShow Answer

How will the costs of an intangible asset being develop internally or self-constructed be reported?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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