Exam 9: Long-Lived Tangible and Intangible Assets

A) patent.
B) copyright.
C) franchise.
D) licensing right.

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A) I - Intangible long-lived asset
B) N - Not a long-lived asset
C) T - Tangible long-lived asset

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A) Multiplying a declining percentage by a constant book value.
B) Multiplying a constant percentage by the previous year's depreciation expense.
C) An increasing amount of depreciation expense each period.
D) Not utilizing the residual value in calculating each year's depreciation expense.

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A) $2,400,000 as equipment and $160,000 as expenses.
B) $2,560,000 as expenses.
C) $2,240,000 as equipment and the rest as expenses.
D) $2,560,000 as equipment.

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Part a
Fixed asset turnover ratio = Net ...

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A) The depreciation expense must be recorded for 6 months,January 1 to July 1.
B) The Equipment asset account must be credited for $1,600,000 to record the sale.
C) Accumulated Depreciation is debited for $612,500 in the entry to record the sale.
D) The loss on the sale is $12,500.

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A) Net sales revenue divided by average net fixed assets.
B) Costs that are expensed in the period incurred.
C) A contractual agreement that allows limited permission for use of a property.
D) Net income divided by average total assets.
E) An estimate of how long a tangible asset will last before it physically wears out.
F) Asset cost minus residual value.
G) Costs that are recorded as revenues.
H) An estimate of how long a company will use a particular asset.
I) Allocating the cost of tangible assets over their limited useful life.
J) A cumulative record of depreciation expense,accumulated depreciation and book value.
K) Asset cost minus accumulated depreciation.
L) Grants the exclusive right to sell or use a creative work.
M) The method whereby different parts of an asset may be depreciated over different useful lives under IFRS.
N) The principle that companies wish to pay the lowest possible tax at the last possible time.
O) Allocating the cost of intangible assets over their limited useful life.

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A) $360,000
B) $40,000
C) $80,000
D) $240,000

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A) The method calculates expense based on the relationship between each year's output and total estimated output.
B) The method calculates expense based on cost divided by the expected useful life.
C) The units-of-production method is an accelerated depreciation method.
D) The units-of-production method is based on the difference in the appraisal value of the asset from one year to the next.

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A) Total assets were too high.
B) Retained earnings were too high.
C) The balance sheet was in balance.
D) Total liabilities were too low.

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A) $158,625 and $141,000
B) $141,000 and $158,625
C) $126,900 and $176,250
D) $126,900 and $158,625

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A) Net income − Interest expense − Income tax expense − Depreciation expense − Amortization expense
B) Net income + Interest expense + Income tax expense + Depreciation expense + Amortization Expense
C) Operating income − Interest expense − Income tax expense
D) Operating income + Depreciation expense + Amortization expense

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A) expense account.
B) contra-asset account.
C) liability account.
D) stockholders' equity account.

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A) When a company expenses the entire cost of a long-lived asset in the first year of use.
B) When a company receives free publicity in return for charitable contributions.
C) A tax law dealing with how companies can depreciate their assets.
D) The acquisition cost of an asset minus its accumulated depreciation.
E) When a company expenses the cost of a long-lived asset by a constant annual amount.
F) The exclusive right to sell or use a product or process that is granted to encourage innovation.
G) Net income plus interest,taxes,depreciation and amortization expenses.
H) Tangible long-lived assets.
I) An intangible asset that represents the value of unidentifiable assets acquired.
J) Names or images that appear with a ® or ^TM.
K) What a company expects to receive when an asset is disposed of at the end of its useful life.
L) Assets whose values do not change over time.
M) When a company allocates the cost of a long-lived asset at a higher rate in the first years of use.
N) The estimated total use a company expects to receive from an asset.

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A) Gain of $86,000.
B) Gain of $55,000.
C) Loss of $55,000.
D) Loss of $86,000.

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A) A change in the estimated useful life.
B) A change in the estimated residual value.
C) Extraordinary repairs that significantly extend the asset's usefulness.
D) A change in the estimated maintenance costs.

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A) a liability account and credits Depreciation Expense.
B) Depreciation Expense and credits Cash.
C) Depreciation Expense and credits a contra-asset account.
D) a long-lived tangible asset account and credits Depreciation Expense.

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