Question 1

For each of the following sentences 11-14,select the word or group of words that best completes the statement.
  ______________________________ is(are)a cost(s)that improves an operating asset and is (are)added to the asset account.

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Question 2

With respect to operating assets,the two different transactions that would appear in the investing activities category of the statement of cash flows are __________________________________ and __________________________________

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Question 3

On January 1,2014,Humansville Company purchased a piece of equipment with a list price of $80,000.The following amounts were related to the equipment purchase:
- Terms of the purchase were 2/10,net 30.Humansville paid for the purchase on January 8.
- Freight costs of $1,250 were incurred.
- A state agency required that a pollution control device be installed on the equipment at a cost of $3,300.
- During installation,the equipment was damaged and repair costs of $4,200 were incurred.
- Architect's fees of $6,100 were paid to redesign the work space to accommodate the new equipment.
- Humansville purchased liability insurance to cover possible damage to the asset.The three-year policy cost $8,700.
- Humansville financed the purchase with a bank loan.Interest of $4,600 was paid on the loan during 2014.
REQUIRED:
Determine the acquisition cost of the equipment.

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The answer of On January 1,2014,Humansville Company purchased a piece...

Question 4

Gommert Co.purchased land and a building for $425,000.The appraised values of the land and the building were $150,000 and $450,000,respectively.In addition,the attorney was paid $10,000 for handling the closing on the property.

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Question 5

Florence,Inc.purchased equipment at the beginning of 2014 for $140,000.The company decided to depreciate the equipment over a 10-year period using the double-declining-balance method.The company estimated the equipment's salvage value at $12,000.Show how the costs should be presented on Florence's financial statements at December 31,2015.Label the statements properly.

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Question 6

Battery Corp.purchased equipment with a cost of $70,000 at the beginning of 2013.The equipment has an estimated life of 25 years or 25,000 units of product.The estimated residual value is $7,500.During 2013,1,100 units of product were produced with this machinery.Determine the following:

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Question 7

Please answer the following questions regarding depreciation:
If a company has a concern about reporting to its stockholders,the depreciation method _________________________ would be used?

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The answer of Please answer the following questions regarding depreciation:
If...

Question 8

For each of the following sentences 11-14,select the word or group of words that best completes the statement.
  ______________________________ is (are)the right to produce or sell a published work.

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Question 9

Select the financial statement on which the user would most likely find the answer to the question given.

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Question 10

Stately Co.began construction of a new factory at the beginning of 2013.At the end of the year,construction was completed,and construction costs totaled $200,000.Stately borrowed $180,000 at the beginning of 2013 to finance the construction and repaid the loan at the end of 2013.The interest rate on the loan was 9%.Determine the following amounts.

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The answer of Stately Co.began construction of a new factory...

Question 11

For each of the following sentences 11-14,select the word or group of words that best completes the statement.
  ______________________________ is an account that can only exist if one company purchases another business and the cost exceeds the fair market values of the identifiable net assets at the time acquired.

Accepted Answer

The answer of For each of the following sentences 11-14,select...

Question 12

Why do many companies use MACRS (Modified Accelerated Cost Recovery System)depreciation for tax purposes?
If a company uses MACRS for depreciation for tax purposes,can it use a different method for financial reporting? Explain why or why not.

Accepted Answer

The answer of Why do many companies use MACRS (Modified...

Question 13

Captain Lewis,Inc.purchased equipment at the beginning of 2014 for $60,000.In addition,Captain Lewis' paid $2,000 for delivery of the equipment to its plant and $1,000 for installation of the equipment.The equipment has an estimated residual value of $7,000 and an estimated life of 7 years or 70,000 hours of operation.Captain Lewis' is looking at alternative depreciation methods for the equipment.Calculate the following:

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Question 14

A change in estimate should be recorded_________________.

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Question 15

Glidewell Company purchased a car for a salesman for $23,500 at the beginning of 2012.The car had an estimated life of 5 years,and an estimated residual value of $3,500.Glidewell used the straight-line depreciation method.At the beginning of 2013,Glidewell incurred $2,500 to replace the car's transmission.This resulted in a 2-year extension of the car's useful life,but no change in the residual value.

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Question 16

The two items that must be estimated with respect to a plant asset in order to properly allocate cost to the affected accounting periods are ______________________________ and ______________________________.

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Question 17

For each of the following sentences 11-14,select the word or group of words that best completes the statement.
  ____________________________________ is (are)the expenditure(s)incurred in the discovery of new knowledge and the translation of research into a design or plan for a new product.

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The answer of For each of the following sentences 11-14,select...

Question 18

Given below are several accounts and balances from Montag Corporation's 2013 financial statements.Prepare the Property,Plant,and Equipment section of the balance sheet and a partial income statement in the space provided below using the accounts provided.

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The answer of Given below are several accounts and balances...

Question 19

On January 1,2014,Aaron Simpson bought a farm store of a small competitor for $620,000.An appraiser,hired to assess the acquired assets' value,determined that the land,building,and equipment had market values of $300,000,$215,000,and $270,000,respectively.
REQUIRED:
1.What is the acquisition cost of each asset? Prepare a journal entry to record the acquisition.
2.Simpson plans to depreciate the building on a straight-line basis for 30 years and the equipment over 16 years .Determine the amount of depreciation expense for 2014 on these newly acquired assets.You can assume zero residual value for all assets.
3.How would the assets appear on the balance sheet as of December 31,2014?

Accepted Answer

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Question 20

Please answer the following questions regarding depreciation:
______________________________ is the GAAP depreciation method considered "accelerated"?

Accepted Answer

The answer of Please answer the following questions regarding depreciation:
______________________________...

Quiz 8: Operating Assets: Property, plant, and Equipment, and Intangibles

For each of the following sentences 11-14,select the word or group of words that best completes the statement. ______________________________ is(are)a cost(s)that improves an operating asset and is (are)added to the asset account.

With respect to operating assets,the two different transactions that would appear in the investing activities category of the statement of cash flows are and

Gommert Co.purchased land and a building for $425,000.The appraised values of the land and the building were $150,000 and $450,000,respectively.In addition,the attorney was paid $10,000 for handling the closing on the property.

Battery Corp.purchased equipment with a cost of $70,000 at the beginning of 2013.The equipment has an estimated life of 25 years or 25,000 units of product.The estimated residual value is $7,500.During 2013,1,100 units of product were produced with this machinery.Determine the following:

Please answer the following questions regarding depreciation: If a company has a concern about reporting to its stockholders,the depreciation method _________________________ would be used?

For each of the following sentences 11-14,select the word or group of words that best completes the statement. ______________________________ is (are)the right to produce or sell a published work.

Select the financial statement on which the user would most likely find the answer to the question given.

Why do many companies use MACRS (Modified Accelerated Cost Recovery System)depreciation for tax purposes? If a company uses MACRS for depreciation for tax purposes,can it use a different method for financial reporting? Explain why or why not.

A change in estimate should be recorded_________________.

The two items that must be estimated with respect to a plant asset in order to properly allocate cost to the affected accounting periods are and .

For each of the following sentences 11-14,select the word or group of words that best completes the statement. ____________________________________ is (are)the expenditure(s)incurred in the discovery of new knowledge and the translation of research into a design or plan for a new product.

Given below are several accounts and balances from Montag Corporation's 2013 financial statements.Prepare the Property,Plant,and Equipment section of the balance sheet and a partial income statement in the space provided below using the accounts provided.

Please answer the following questions regarding depreciation: ______________________________ is the GAAP depreciation method considered "accelerated"?