Question 1

Explain the impact, if any, on depreciation when estimates that determine depreciation change.

Accepted Answer

The answer of Explain the impact, if any, on depreciation...

Question 2

Explain the purpose of and method of depreciation for partial years.

Accepted Answer

The answer of Explain the purpose of and method of...

Question 3

On January 1, Year 1, Acadia purchased a computer system that cost $1,480,000. The estimated useful life of the computer is 3 years and salvage value is $40,000. Straight-line depreciation is to be used. On January 1, Year 2, the company determined that the estimated useful life of the computer would be 4 years instead of 3 years. The estimated salvage value will only be $10,000.
Prepare the journal entry to record depreciation expense for Year 1.
Prepare the journal entry to record depreciation expense for Year 2.

Accepted Answer

The answer of On January 1, Year 1, Acadia purchased...

Question 4

A machine was purchased for $37,000 and depreciated for five years on a straight-line basis under the assumption it would have a ten-year life and a $1,000 salvage value. At the beginning of the machine's sixth year it was recognized the machine had three years of remaining life instead of five and that at the end of the remaining three years its salvage value would be $1,600. What amount of depreciation should be recorded in each of the machine's remaining three years?

Accepted Answer

The answer of A machine was purchased for $37,000 and...

Question 5

On July 1 of the current year, a company purchased and placed in service a machine with a cost of $240,000. The company estimated the machine's useful life to be four years or 60,000 units of output with an estimated salvage value of $60,000. During the current year, 15,000 units were produced.
Prepare the necessary December 31 adjusting journal entry to record depreciation for the current year assuming the company uses:
a. The straight-line method of depreciation.
b. The units-of-production method of depreciation.
c. The double-declining balance method of depreciation.

Accepted Answer

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

Question 6

Compare the different depreciation methods (straight-line, units-of-production, and double-declining-balance) with respect to the computation of depreciation per period and the total depreciation over the life of the asset.

Accepted Answer

The answer of Compare the different depreciation methods (straight-line, units-of-production,...

Question 7

The founders of Games2U understand that managing plant assets is important to their company's success. What are some of the plant asset issues that the founders identify as important to them?

Accepted Answer

The answer of The founders of Games2U understand that managing...

Question 8

On April 1, Year 1, SAS Corp. purchased and placed in service a plant asset. The following information is available regarding the plant asset:  Make the necessary adjusting journal entries at December 31, Year 1, and December 31, Year 2 to record depreciation for each year under the following depreciation methods:
a. Straight-line.
b. Double-declining-balance.

Accepted Answer

The answer of On April 1, Year 1, SAS Corp....

Question 9

Explain how to calculate total asset turnover. Describe what it reveals about a company's financial condition, whether a higher or lower ratio is desirable, and how it is best applied for comparative purposes.

Accepted Answer

The answer of Explain how to calculate total asset turnover....

Question 10

What are some of the variables that make a plant asset's useful life difficult to predict?

Accepted Answer

The answer of What are some of the variables that...

Question 11

Describe the accounting for intangible assets, including their acquisition, cost allocation, and accounts involved.

Accepted Answer

The answer of Describe the accounting for intangible assets, including...

Question 12

What are the general accounting procedures for recording asset disposals?

Accepted Answer

The answer of What are the general accounting procedures for...

Question 13

A company's property records revealed the following information about its plant assets:  Calculate the depreciation expense for each machine for the year ended December 31 for Year 1, and for the year ended December 31 for Year 2.

Accepted Answer

The answer of A company's property records revealed the following...

Question 14

A company purchased a truck on October 1 of the current year at a cost of $40,000. The truck is expected to last six years and has a salvage value of $2,200. The company's annual accounting period ends on December 31.
1. What is the depreciation expense for the current year, assuming the straight-line method is used?
2. What is the depreciation expense for the current year, assuming the double-declining-balance method is used?

Accepted Answer

The answer of A company purchased a truck on October...

Question 15

Explain (in detail) how to compute each of the following depreciation methods: straight-line, units-of-production, and double-declining-balance.

Accepted Answer

The answer of Explain (in detail) how to compute each...

Question 16

Explain the difference between revenue expenditures and capital expenditures and how they are recorded in the accounting system.

Accepted Answer

The answer of Explain the difference between revenue expenditures and...

Question 17

On September 30 of the current year, a company acquired and placed in service a machine at a cost of $700,000. It has been estimated that the machine has a service life of five years and a salvage value of $40,000. Using the double-declining-balance method of depreciation, prepare a schedule showing depreciation amounts for the current year and the next 4 years (round answers to the nearest dollar). The company closes its books on December 31 of each year.

Accepted Answer

The answer of On September 30 of the current year,...

Question 18

How is the cost principle applied to plant assets, acquisitions, including lump-sum purchases?

Accepted Answer

The answer of How is the cost principle applied to...

Question 19

Describe the accounting for natural resources, including their acquisition, cost allocation, and account titles.

Accepted Answer

The answer of Describe the accounting for natural resources, including...

Question 20

A company purchased a machine for $75,000 that was expected to last 6 years and to have a salvage value of $6,000. At the beginning of the machine's fourth year the company decided that the estimated useful life should be revised to a total of 10 years instead of 6 years. Also, the salvage value was re-estimated to be $5,500. Straight-line depreciation was used throughout the machine's life. Calculate the depreciation expense for the fourth year of the machine's useful life.

Accepted Answer

The answer of A company purchased a machine for $75,000...

Quiz 10: Plant Assets, Natural Resources, and Intangibles