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Exam 7: Fixed Assets and Intangible Assets

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Question 1

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You have been hired by a high-growth startup company to assist in the determination of what depreciation method to employ for financial reporting.The company's fixed assets are equally divided among buildings and high-tech equipment (heavily used in the initial years).

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(a) Yes,generally accepted accounting pr...

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Question 2

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Land improvements include:

A) freight.
B) surveying fees.
C) sales tax.
D) outdoor lighting.

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Question 3

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A company acquired some land for $75,000 to construct a new office complex.Legal fees paid were $2,750,delinquent taxes assumed were $3,250,and $6,350 was paid to remove an old building.Materials salvaged from the demolition of the building were sold for $2,300.Determine the cost of the land to be reported on the balance sheet.

Goodwill is:

The accounting term depreciation measures:

A company purchased a photocopy machine for $16,000.It has a useful life of 4 years and a residual value of $1,000.Compute depreciation for the second year under each of the following methods: (a)straight-line and (b)double-declining-balance.

Determine the cost of the land,based on the following data.

Which of the following is an example of a capital expenditure?

A machine with a useful life of 6 years and a residual value of $3,000 was purchased at the beginning of year 1 for $30,000.The machine was sold for $15,000 on April 1 in year 4.

The fixed asset turnover is calculated as .

Which of the following expenditures would be included in the cost of a fixed asset?

A fixed asset with a cost of $15,000 and accumulated depreciation of $12,500 is sold for $1,750.What is the amount of gain or loss on disposal of the fixed asset?

Identify the following as a Fixed Asset (FA),Intangible Asset (IA),Natural Resource (NR),or None of these (N). (a) Computer (b) Patent (c) Oil reserve (d) Goodwill (e) U.S. Treasury note (f) Land used for employee parking (g) Gold mine

A company made some expensive repairs to equipment and buildings during the past year.(a)What criteria is used in determining whether the repairs are capital expenditures or revenue expenditures,and (b)what is the effect on the company's financial statements if they are incorrectly recorded as capital expenditures?

A company acquired mineral rights for $7,500,000.The mineral deposit is estimated at 600,000 tons and during the year 100,000 tons were extracted and sold.

A fixed asset turnover ratio of 1.65 for a company indicates that:

If the proceeds from a sale of equipment is greater than the book value of the equipment as on the date of sale,a loss is recorded.

The cost of removal of an old building to make the land ready for its intended use is charged to:

All amounts paid to get an asset in place and ready for use are referred to as:

Expenditures made to extend an asset's life are called revenue expenditures.