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Study Resources (Accounting)

Chapter 10:  Fixed Assets and Intangible Assets Classify each of the following as: a.  Ordinary maintenance and repairs b.  Asset improvements c.  Extraordinary repairs 133.  Fixing damage due to a car accident 134.  Paving a new parking lot 135.  Resurfacing a pool in an apartment building 136.  Exterior and interior painting 137.  Adding refrigerant to an air conditioning system 138. .
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Chapter 10:  Fixed Assets and Intangible Assets Match each account name to the financial statement section (a-i) in which it would appear. Current Assets Fixed Assets Intangible Assets Current Liability Long-Term Liability Owners’ Equity Revenues Operating Expenses Other Income/Expense 134.  Loss from Impaired Goodwill 135.  Buildings 136.  Trademarks 137.  Gain on Sale of Equipment 138.  Research and Development Costs 139.  Loss on Disposal of Asset 140.  Accumulated .
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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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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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11.The discount on a note payable is charged to an account that has a normal credit balance. a.True b.False 12.The proceeds from discounting a $20,000, 60-day, note payable at 6% is $20,200. a.True b.False 13.Amounts withheld from each employee for social security and Medicare vary by state. a.True b.False 14.An employee's take-home pay is equal to gross pay less.
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68.Taylor Bank lends Guarantee Company $150,000 on January 1.  Guarantee Company signs a $150,000, 8%, 9-month note. The entry made by Guarantee Company on January 1 to record the proceeds and issuance of the noteis a. Interest Expense12,000 Cash138,000 Notes Payable150,000 b. Cash150,000 Notes Payable150,000 c. Cash162,000 Interest Expense12,000 Notes Payable150,000 d. Notes Payable120,000 Interest Payable7,200 Cash120,000 Interest Expense7,200 69.The journal entry to.
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Chapter 10:  Fixed Assets and Intangible Assets 133.  Equipment acquired at a cost of $126,000 has a book value of $42,000.  Journalize the disposal of the equipmentunder the following independent assumptions. The equipment had no market value and was discarded. The equipment is sold for $54,000. The equipment is sold for $24,000. The equipment is.
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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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Chapter 10:  Fixed Assets and Intangible Assets 133.  On the first day of the fiscal year, a new walk-in cooler with a list price of $58,000 was acquired in exchange foran old cooler and $44,000 cash.  The old cooler had a cost of $25,000 and accumulated depreciation of $16,000.Assume the transaction.
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Chapter 10:  Fixed Assets and Intangible Assets Classify each of the following costs associated with long-lived assets as one of the following: Land improvements Buildings Land Machinery and equipment 134.  Outdoor lighting at new business location 135.  Cost assessed by city for paving a public street that borders land on which a new business location will beconstructed 136. .
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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.  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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1.Receiving payment prior to delivering goods or services causes a current liability to be incurred. a.True b.False 2.All long-term liabilities eventually become current liabilities. a.True b.False 3.For a current liability to exist, the liability must be due usually within a year and must be paid out of current assets. a.True b.False 4.The borrower issues a note payable to a.
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Chapter 10:  Fixed Assets and Intangible Assets 133.  Financial statement data for the years ended December 31 for Parker Corporation are as follows: Current Year Prior Year Sales Fixed assets (net):Beginning of the year $2,595,600 $901,070 $2,409,498 $820,000 End of the year 829,330 901,070 a)    Determine the fixed asset turnover for the current and prior years. b)   Does the change in fixed asset turnover.
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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 Match the intangible assets described with their proper classification (a-d). Patent Copyright Trademark Goodwill 134.  Rights to sell a book and make a profit 135.  A new kitchen gadget that can be produced by only one company 136.  Mickey Mouse 137.  Location of a company 138.  McDonald’s golden arches 139.  I-Tunes music 140.  Reputation of.
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108.Which of the following is an example of a variable component of a payroll system? a.hours worked b.Medicare tax rate c.rate of pay d.social security number 109.According to a summary of the payroll of Scotland Company, $450,000 was subject to the 6.0% social security taxand $500,000 was subject to the 1.5% Medicare tax.  Federal income.
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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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48.Current liabilities are due a.but not receivable for more than one year b.but not payable for more than one year c.and receivable within one year d.and payable within one year 49.Notes may be issued a.when assets are purchased b.to creditors to temporarily satisfy an account payable created earlier c.when borrowing money d.for all of these 50.On June 8, Smith Technologies.
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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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21.Medicare taxes are paid by both the employee and the employer. a.True b.False 22.Federal unemployment taxes are paid by the employer and the employee. a.True b.False 23.Federal unemployment compensation taxes that are collected by the federal government are notpaid directly to theunemployed but are allocated among the states for use in state programs. a.True b.False 24.Federal income taxes are.
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137.  Roseland Design borrowed $700,000 on a 90-day note from CorpOne Funding Company. CorpOne discounts thenote at 8%. (Assume a 360-day year is used for interest calculations.) (a)  Journalize Roseland’s entries to record: a.    The issuance of the note. b.    The payment of the note at maturity. (b)  Journalize CorpOne’s entries to record: a.    The.
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118.The journal entry a company uses to record fully funded pension rights for its salaried employees at the end of theyear is a.debit Salary Expense; credit Cash b.debit Pension Expense; credit Unfunded Pension Liability c.debit Pension Expense; credit Unfunded Pension Liability and Cash d.debit Pension Expense; credit Cash 119.The journal entry a company uses to.
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Chapter 10:  Fixed Assets and Intangible Assets 133.  Machinery acquired at a cost of $80,000 and on which there is accumulated depreciation of $55,000 (includingdepreciation for the current year to date) is exchanged for similar machinery.  Assume that the transaction hascommercial substance. For financial reporting purposes, present entries to record the.
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Chapter 10:  Fixed Assets and Intangible Assets Classify each of the following costs associated with long-lived assets as one of the following: Buildings Machinery and equipment Land Land improvements 134.  Cost of insurance during the construction of new office building 135.  Landscaping at new business location 136.  Interest on money borrowed to finance construction of new office building 137. .
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78.Which of the following would be used to compute the federal income taxes to be withheld from an employee'searnings? a.FICA tax rate b.wage and tax statement c.FUTA tax rate d.wage bracket and withholding table 79.Which of the following taxes would be deducted in determining an employee's net pay? a.FUTA taxes b.SUTA taxes c.FICA taxes d.all are correct 80.Which of the.
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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 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.  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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41.A defined contribution plan promises employees a fixed annual pension benefit. a.True b.False 42.In a defined benefits plan, the employer bears the investment risks in funding a future retirement income benefit. a.True b.False 43.The accounting for defined benefit plans is usually very easy and straightforward. a.True b.False 44.During the first year of operations, a company granted warranties on its.
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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.  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 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.  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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88.The following totals for the month of June were taken from the payroll register of Arcon Company: Salaries expense$14,000 Social security and Medicare taxes withheld1,050 Income taxes withheld2,600 Retirement savings1,000 The entry to record the payment of net pay would include a a. debit to salaries payable for $14,000 b. debit to salaries payable for $9,350 c. credit.
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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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31.Employers are required to compute and report payroll taxes on a calendar-year basis, even if a different fiscal yearis used for financial reporting and income tax purposes. a.True b.False 32.Payroll taxes levied against employers become an employer liability at the time the employee wages are incurred. a.True b.False 33.Most employers use payroll checks drawn on a.
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137.  Journalize the following entries on the books of Winston Co. for August 1, September 1, and November 30.(Assume a 360-day year is used for interest calculations.) Aug.   1Winston Co. purchased merchandise for $75,000 on account from Bagley Co., terms n/30.Sept.   1Winston Co. issued a 90-day, 6% note for $75,000 on.
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137.  Journalize the following entries on the books of the borrower and creditor.  Label accordingly. (Assume a 360-dayyear is used for interest calculations.) Jun.1Regis Co. purchased merchandise on account from Winthrop Co., $60,000, terms n/30. Jun.  30Regis Co. issued a 60-day, 5% note for $60,000 on account. Aug. 29Regis Co. paid the amount.
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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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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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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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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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137.  A business issued a 120-day, 6% note for $10,000 to a creditor on account. The company uses a 360-day year forinterest calculations. Journalize the entries to record (a) the issuance of the note and (b) the payment of the note atmaturity, including interest. Description Debit Credit (a) (b) 138.  On August 1, Batson Company issued.
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58.Assuming a 360-day year, when a $50,000, 90-day, 9% interest-bearing note payable matures, total payment will be a. $51,125 b. $54,500 c. $1,125 d. $4,500 59.Assuming a 360-day year, proceeds of $48,750 were received from discounting a $50,000, 90-day note at abank.  The discount rate used by the bank in computing the proceeds was a. 6.25% b..
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Chapter 10:  Fixed Assets and Intangible Assets 133.  On October 1, Sebastian Company acquired new equipment with a fair market value of $458,000.  Sebastianreceived a trade-in allowance of $92,000 on the old equipment of a similar type and paid cash of $366,000.  Thefollowing information about the old equipment is obtained from.
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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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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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