Question 1

_________________________ are capital expenditures that make a plant asset more productive; they often involve adding a component to an asset or replacing one of its old components with a better one and do not always increase an asset's life.

Accepted Answer

The answer of _________________________ are capital expenditures that make a...

Question 2

The formula for calculating total asset turnover is _______________________________________.

Accepted Answer

The answer of The formula for calculating total asset turnover...

Question 3

A company purchased office equipment for $4,300 by trading in old equipment with a cost of $2,000 and that had accumulated depreciation of $1,900 as of the exchange date. The company received a $75 trade-in allowance for the old equipment with the balance of $4,225 paid in cash. Prepare the journal entry to record the exchange.

Accepted Answer

The answer of A company purchased office equipment for $4,300...

Question 4

On April 1 of the current year, a company traded an old machine that originally cost $32,000 and that had accumulated depreciation of $24,000 for a similar new machine that had a cash price of $40,000.
a. Give the entry to record the exchange under the assumption that a $5,000 trade-in allowance was received and the balance of $35,000 was paid in cash.
b. Give the entry to record the exchange under the assumption that instead of a $5,000 trade-in allowance, a $12,500 trade-in allowance was received and the balance of $27,500 was paid in cash.

Accepted Answer

The answer of On April 1 of the current year,...

Question 5

A company exchanged an old truck for a newer model. The old truck account had a cost of $76,000 and accumulated depreciation of $65,000 as of the exchange date. The new truck had a cash price of $84,000, but the company was given a $15,000 trade-in allowance and the balance of $69,000 was paid in cash. Prepare the journal entry to record the exchange.

Accepted Answer

The answer of A company exchanged an old truck for...

Question 6

During the current year, a company acquired a new computer with a cash price of $12,800 by exchanging an old one on which the company received a $1,500 trade-in allowance (with the balance of $11,300 paid in cash). The old computer cost $9,000 and its accumulated depreciation was $5,500 as of the exchange date. Prepare the journal entry to record the exchange.

Accepted Answer

The answer of During the current year, a company acquired...

Question 7

The process of allocating the cost of a natural resource to the period when it is consumed is called _____________________.

Accepted Answer

The answer of The process of allocating the cost of...

Question 8

___________________ are additional costs of plant assets that do not materially increase the asset's life or productive capabilities.

Accepted Answer

The answer of ___________________ are additional costs of plant assets...

Question 9

Revising estimates of the useful life or salvage value of a plant asset is referred to as a ____________________________________________.

Accepted Answer

The answer of Revising estimates of the useful life or...

Question 10

The three usual means for disposal of an asset are: _________________________________________________________.

Accepted Answer

The answer of The three usual means for disposal of...

Question 11

______________ is the process of systematically allocating the cost of an intangible asset to expense over its estimated useful life.

Accepted Answer

The answer of ______________ is the process of systematically allocating...

Question 12

_____________________ depreciation uses a depreciation rate that is a multiple of the straight-line rate and applies it to an asset's beginning-of-period book value.

Accepted Answer

The answer of _____________________ depreciation uses a depreciation rate that...

Question 13

The _____________________ principle requires that companies report the amount of accumulated depreciation on plant assets as well as the depreciation methods used to determine the annual depreciation expense.

Accepted Answer

The answer of The _____________________ principle requires that companies report...

Question 14

The three main factors in computing depreciation are: (1) ____________________, (2) ____________________, (3) ___________________.

Accepted Answer

The answer of The three main factors in computing depreciation...

Question 15

A company traded an old forklift for a new forklift, receiving a $10,500 trade-in allowance and paying the remaining $37,200 in cash. The old forklift cost $39,000 and straight-line accumulated depreciation of $27,200 had been recorded as of the exchange date under the assumption it would last five years and have a $5,000 salvage value.
a. What was the book value of the old forklift on the date of the exchange?
b. What amount of gain or loss (indicate which) should be recognized in recording the exchange?
c. What amount should be recorded as the cost of the new forklift?

Accepted Answer

The answer of A company traded an old forklift for...

Question 16

_______________________ depreciation recognizes equal amounts of annual depreciation over the life of an asset.

Accepted Answer

The answer of _______________________ depreciation recognizes equal amounts of annual...

Question 17

_____________________ is an estimate of an asset's value at the end of its useful life.

Accepted Answer

The answer of _____________________ is an estimate of an asset's...

Question 18

_______________________ are expenditures that extend an asset's useful life beyond its original estimate.

Accepted Answer

The answer of _______________________ are expenditures that extend an asset's...

Question 19

Match between columns
                        Premises: The process of allocating the cost of natural resources to periods when they are consumed.
An expenditure to make a plant asset more efficient or productive.
Expenditures made to keep a plant asset in normal, good operating condition .
A depreciation method that charges a varying amount to expense for each period of an asset's useful life depending on its usage.
An expenditure reported on the current income statement as an expense because it does not provide a material benefit in future periods.
A method that yields larger depreciation expense: during the early years of an asset's life and smaller expense in the later years.
Certain nonphysical assets used in operations that confer on their owners long-term rights, privileges, or competitive advantages.
The amount by which the company's value exceeds the value of its individual assets and liabilities.
A measure of a company's ability to use its assets to generate sales.
A change in a financial statement amount that results from new information, subsequent developments, better insight, or improved judgment.

Accepted Answer

The Answer of Depletion and Ordinary repairs and Betterment and is...

Question 20

Match between columns
                        Premises: The insufficient capacity of plant assets to meet the company's productive demands.
Assets that increase the benefits of land, have a limited useful life and are subject to depreciation.
A condition which, because of new inventions and improvements, a plant asset is no longer useful in producing goods or services with a competitive advantage.
An estimate of an asset's value at the end its benefit period.
Major repairs that extend the useful life of a plant asset beyond its original estimate.
The process of allocating the cost of natural resources to the periods when they are consumed.
The process of allocating the cost of an intangible asset to expense over its estimated useful life.
An exclusive right granted to its owner to manufacture and sell an item or to use a process, for 20 years.
The total cost of a plant asset less its accumulated depreciation.
A right granted that gives its owner the exclusive privilege to publish and sell musical, literary or artistic work during the life of the creator plus 50 years.

Accepted Answer

The Answer of Copyright and Patent. and Extraordinary repairs and is...

Quiz 8: Accounting for Long-Term Assets