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Chapter 10:  Fixed Assets and Intangible Assets 133.  What is the cost of the land, based upon the following data? Land purchase price $178,000 Broker's commission 15,000 Payment for the demolition and removal of existing building 5,000 Cash received from the sale of materials salvaged from the demolished building 2,000 134.  Falcon Company acquired an adjacent lot to construct a new warehouse,.
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Chapter 10:  Fixed Assets and Intangible Assets 11.Expenditures that increase operating efficiency or capacity for the remaining useful life of a fixed asset are calledcapital expenditures. a.True b.False 12.The cost of replacing an engine in a truck is an example of ordinary maintenance. a.True b.False 13.An intangible asset is one that has a physical existence. a.True b.False 14.A capitalized asset.
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127. Journalize the following transactions using the direct write-off method of accounting for uncollectible receivables. April 1 Soldmerchandise on account to Jim Dobbs, $7,200.  The cost of the merchandise is $5,400. June 10 Received payment for one-third of the receivable from Jim Dobbs and wrote off the remainder. Oct. 11Reinstated the account of.
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127. Determine the due date and amount of interest due at maturity on the following notes: Origination Face Term Interest Maturity Interest Date Amount of Note Rate Date Amount (a) Mar. 15 $8,000 60 days 9% _______ _______ (b) May 1 $12,000 90 days 8% _______ _______ 128. Blackwell Industries received a 120-day, 9% note for $180,000, dated August 10 from a customer on account. Required: 1.                Determine the due date of the note. 2.                Determine the maturity value of.
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Chapter 10:  Fixed Assets and Intangible Assets 133.  XYZ Co. incurred the following costs related to the office building used in operating its sports supply company: Replaced a broken window. Replaced the roof that had been on the building 23 years. Serviced all the air conditioners before summer started. Replaced the air conditioners in the.
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Chapter 10:  Fixed Assets and Intangible Assets 31.The amount of depreciation expense for the first full year of use of a fixed asset costing $95,000, with an estimatedresidual value of $5,000 and a useful life of 5 years, is $19,000 by the straight-line method. a.True b.False 32.The amount of depreciation expense for a fixed.
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127. Journalize the following transactions for the Scott Company: November  4 Received a $6,500, 90-day, 6% note from Michael Tim’s in payment of his account.December 31               Accrued interest on the Tim’s note. February2 Received the amount due from Tim’s on his note. Date Description Post.Ref. Debit Credit 128. For each of the following notes receivables held by.
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Chapter 10:  Fixed Assets and Intangible Assets 21.The depreciable cost of a building is the same as its acquisition cost. a.True b.False 22.It is necessary for a company to use the same depreciation method for all of its depreciable assets. a.True b.False 23.It is notnecessary for a company to use the same depreciation method for financial statements.
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Chapter 10:  Fixed Assets and Intangible Assets 121.The Bacon Company acquired new machinery with a price of $15,200 by trading in similar old machinery andpaying $12,700.  The old machinery originally cost $9,000 and had accumulated depreciation of $5,000.  Inrecording this transaction, Bacon Company should record a.a loss of $1,500 b.the new machinery at.
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127. The following are the current assets of Barnes Co. as of December 31: Accounts Receivable $ 38,000 Allowance for Doubtful Accounts 5,000 Cash 45,000 Interest Receivable 5,500 Merchandise Inventory 88,000 Notes Receivable 100,000 Prepare the current assets section of the balance sheet. 128. Based on the following data and using a 365-day year, compute (a) the accounts receivable turnover and (b) thenumber of.
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Chapter 10:  Fixed Assets and Intangible Assets 133.  A number of major structural repairs completed at the beginning of the current fiscal year at a cost of $1,000,000are expected to extend the life of a building 10 years beyond the original estimate.  The original cost of the buildingwas $6,552,000, and it.
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127. For each of the following scenarios, indicate the amount of the adjusting journal entry for bad debt expense to berecorded, the balance in allowance for doubtful accounts after adjustment at December 31, and the net realizablevalue of accounts receivable at December 31. a)  Based on an analysis of Simmon’s Company’s.
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Chapter 10:  Fixed Assets and Intangible Assets 133.  Solare Company acquired mineral rights for $60,000,000.  The diamond deposit is estimated at 6,000,000tons.  During the current year, 2,300,000 tons were mined and sold. Determine the depletion rate. Determine the amount of depletion expense for the current year. Journalize the adjusting entry to recognize the depletion.
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Chapter 10:  Fixed Assets and Intangible Assets 1.Long-lived assets that are intangible in nature, used in the operations of the business and notheld for sale in theordinary course of business are called fixed assets. a.True b.False 2.The acquisition costs of property, plant, and equipment should include all normal, reasonable and necessary costs toget the.
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127. For a business that uses the allowance method of accounting for uncollectible receivables: (a)       Journalize the entries to record the following: (1)         Record the adjusting entry at December 31, the end of the first fiscal year, to recordthe bad debt expense.  The accounts receivable account has a balance of $800,000,and the.
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Chapter 10:  Fixed Assets and Intangible Assets 133.  The following information was taken from a recent annual report of Harrison Company (in millions): Current Year Preceding Year Land and buildings $726 $361 Machinery, equipment, and internal-use software 595 470 Office furniture and equipment 94 81 Other fixed assets related to leases 760 569 Accumulated depreciation and amortization 894 644 Required: (1)             Compute the book value of the fixed assets for.
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Chapter 10:  Fixed Assets and Intangible Assets 133.  Golden Sales has bought $135,000 in fixed assets on January 1st associated with sales equipment. The residualvalue of these assets is estimated at $10,000 at the end of their 4-year service life. Golden Sales managers want toevaluate the options of depreciation. (a) Compute the.
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127. Journalize the following transactions for Lucite Company. November 14 Received a $4,800.00, 90-day, 9% note from Alan Albertson in payment of his account.December 31               Accrued interest on the Albertson note. February 12 Received the amount due from Albertson on his note. Date Description Post.Ref. Debit Credit 128. For each of the following notes receivables held by.
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Chapter 10:  Fixed Assets and Intangible Assets 133.  A machine costing $185,000 with a 5-year life and $20,000 residual value was purchased January 2.  Computedepreciation for each of the five years, using the double-declining-balance method. 134.  Computer equipment was acquired at the beginning of the year at a cost of $63,000 that.
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Chapter 10:  Fixed Assets and Intangible Assets 133.  On July 1, Sterns Co. acquired patent rights for $36,000.  The patent has a useful life of 6 years and a legal life of15 years.  Journalize the adjusting entry on December 31 to recognize the amortization. Journal Date Description Post.Ref. Debit Credit 134.  Identify the following as a fixed asset.
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127. Discuss the (1) focus and (2) financial statement emphasis of (a) the percent of sales and (b) the analysis ofreceivables methods of estimating bad debts. 128. Morry Company wrote off the following accounts receivable as uncollectible for the first year of its operationsending December 31: Required: Customer Amount J. Jackson $10,000 L. Stanton 9,500 C. Barton 13,100 S. Fenton 2,400 Total $35,000 (1)            .
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Chapter 10:  Fixed Assets and Intangible Assets 81.A machine with a cost of $120,000 has an estimated residual value of $15,000 and an estimated life of 5 years or15,000 hours. It is to be depreciated by the units-of-output method.  What is the amount of depreciation for thesecond full year, during which.
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127. Journalize the following transactions in the accounts of Simmons Company: Mar.   1 Received a $60,000, 60-day, 6% note dated March 1 from Bynum Company on account. Mar. 18 Received a $25,000, 60-day, 9% note dated March 18 from Solo Company on account. Apr. 30 The note dated March 1 from Bynum Company.
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Match each description to the appropriate term (a-h). Face amount Term Interest Maturity value Dishonored note Maker Notes receivable Interest rate 128. A formal, written instrument of credit that represents amounts due from customers 129. The amount due that must be paid at the due date of a note receivable 130. The amount charged for using the money of another party 131..
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Chapter 10:  Fixed Assets and Intangible Assets 133.  On July 1, Andrew Company purchased equipment at a cost of $150,000 that has a depreciable cost of $120,000and an estimated useful life of 3 years or 60,000 hours. Using straight-line depreciation, prepare the journal entry to record depreciation expense for (a) the first.
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Chapter 10:  Fixed Assets and Intangible Assets 133.  Determine the depreciation, for the year of acquisition and for the following year, of a fixed asset acquired onOctober 1 for $500,000, with an estimated life of 5 years, and residual value of $50,000, using (a) the doubledeclining-balance method and (b) the straight-line.
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Chapter 10:  Fixed Assets and Intangible Assets 51.Losses on the discarding of fixed assets are reported in the income statement. a.True b.False 52.A gain can be realized when a fixed asset is discarded. a.True b.False 53.When old equipment is traded in for a new equipment, the difference between the list price and the trade inallowance is called.
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127. Watson Company issued a 60-day, 8% note for $18,000, dated April 5, to Laker Company on account. Assume a360-day year when calculating interest. (a)             Determine the due date of the note. (b)            Determine the maturity value of the note. (c)             Journalize the entries to record the following: (1)            Receipt of the note by.
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Chapter 10:  Fixed Assets and Intangible Assets 61.A characteristic of a fixed asset is that it is a.used in the operations of a business b.a short-term investment c.intangible d.held for sale in the ordinary course of the business 62.Land acquired so it can be resold in the future is listed on the balance sheet as a(n) a.fixed.
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Chapter 10:  Fixed Assets and Intangible Assets 133.  For each of the following fixed assets, determine the depreciation expense for Year 3:Disposal date is N/A if asset is still in use. Method:  SL = straight line; DDB = double declining balanceAssume the estimated life is 5 years for each asset. Item Cost ResidualValue Purchase Date Disposal date Depr. Method Depr. Expense Year.
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Chapter 10:  Fixed Assets and Intangible Assets 41.Intangible assets differ from property, plant, and equipment assets in that they lack physical substance. a.True b.False 42.The cost of a patent with a remaining legal life of 10 years and an estimated useful life of 7 years is amortized over10 years. a.True b.False 43.The transfer to expense of the.
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127. On the basis of the following data related to assets due within one year for Simons Co., prepare a partial balancesheet in good form at December 31. Show total current assets. Cash$ 56,000 Accounts receivable325,000 Allowance for doubtful accounts25,000 Interest receivable3,000 Supplies4,000 Inventory45,000 Other current assets10,000 BUSPROG: Analytic 128. On the basis of the following data related to.
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127. Other than Accounts Receivable and Notes Receivable, name other receivables that might be included in thegeneral ledger. 128. Discuss the similarities and differences between accounts receivable, notes receivable, and other receivables. 129. List at least three indicators that a receivable may be uncollectible. 130. Discuss the two methods for recording bad debt.
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Chapter 10:  Fixed Assets and Intangible Assets 111.The process of transferring the cost of an asset to an expense account is called all of the following except a.depletion b.allocation c.amortization d.depreciation 112.Fixed assets are ordinarily presented on the balance sheet a.at current market values b.at cost less accumulated depreciation c.at replacement costs d.in a separate section along with intangible assets 113.The.
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Chapter 10:  Fixed Assets and Intangible Assets 133.  Chasteen Company acquired mineral rights for $9,100,000. The mineral deposit is estimated at 65,000,000tons.  During the current year, 18,375,000 tons were mined and sold. Required: (1)             Determine the amount of depletion expense for the current year. (2)             Journalize the adjusting entry to recognize the depletion expense. 134. .
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116.When a company receives an interest-bearing note receivable, it will a.debit Notes Receivable for the maturity value of the note b.debit Notes Receivable for the face value of the note c.credit Notes Receivable for the maturity value of the note d.credit Notes Receivable for the face value of the note 117.Paper Company receives a $6,000,.
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Match each description to the appropriate term (a-i). a.  Accounts receivable turnover b.  Net realizable value c.  Accounts receivable d.  Aging report e.  Receivables f.   Direct write-off method g.  Allowance for doubtful accounts h.  Bad debt expense i.    Factoring 127. A receivable created from selling merchandise or services on account 128. A list of customer accounts sorted by age classes 129. A.
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127. Determine the amount to be added to Allowance for Doubtful Accounts in each of the following cases and indicatethe ending balance in each case. (a)          Credit balance of $300 in Allowance for Doubtful Accounts just prior toadjustment.  Analysis of Accounts Receivable indicates uncollectible receivables of $8,500. (b)         Credit balance of $500.
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127. For the fiscal years 1 and 2, Grange Co. reported the following: Year Ended December 31, Year 1 Year 2 Sales $44,123,486 $34,124,961 Accounts receivable 749,321 719,365 Compute the accounts receivable turnover for Year 2. Round to two decimals. b.    Compute the number of days’ sales in receivable at the end of Year 2. Round to two decimals. 128. Financial statement.
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Chapter 10:  Fixed Assets and Intangible Assets 91.Expected useful life is a.calculated when the asset is sold b.estimated at the time that the asset is placed in service c.determined each year that the depreciation calculation is made d.none of these 92.The calculation for annual depreciation using the straight-line depreciation method is a.Initial cost / Estimated useful life b.Initial.
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Chapter 10:  Fixed Assets and Intangible Assets 133.  Prior to adjustment at the end of the year, the balance in Trucks is $300,900 and the balance in Accumulated Depreciation—Trucks is $88,200.  Details of the subsidiary ledger are as follows: Truck No. Cost Estimated Residual Value Estimated Useful Life Accumulated Depreciation at Beginning of Year Miles Operated During.
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Chapter 10:  Fixed Assets and Intangible Assets 133.  Equipment was purchased on January 5, year 1, at a cost of $90,000.  The equipment had an estimated useful lifeof 8 years and an estimated residual value of $8,000. After using the equipment for 3 years, the useful life was revised to a total.
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Match each description to the appropriate term (a-d). Each term may be used more than once. Direct write-off method Aging of receivables method Percent of sales method Allowance method 128. This method records bad debts when specific accounts are deemed uncollectible. 129. When using this method, estimated bad debts are added to the existing allowance balance. 130..
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Chapter 10:  Fixed Assets and Intangible Assets 71.A capital expenditure results in a debit to a.an asset account b.an expense account c.a liability account d.a capital account 72.Which of the following below is an example of a capital expenditure? a.replacing an engine in a company car b.cleaning the carpet in the front room c.replacing all burned-out light bulbs in.
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Chapter 10:  Fixed Assets and Intangible Assets 101.The accumulated depletion of a natural resource is reported on the a.balance sheet as depreciation from the cost of the resource b.income statement as a deduction from revenues c.income statement as an increase in revenue d.balance sheet as a deduction from the cost of the resource 102.The process of.
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Chapter 10:  Fixed Assets and Intangible Assets 133.  On July 1, Hartford Construction purchases a bulldozer for $228,000. The equipment has a 9-year life with aresidual value of $16,000. Hartford uses the units-of-output method depreciation, and the bulldozer is expected toyield 26,500 operating hours. (a) Calculate the depreciation expense per hour of.
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