FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 11: Operational Assets: Utilization and Impairment

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 21

Multiple Choice

Review LaterAdd Note

Review Later

Using the straight-line method, depreciation for 2010 and the equipment's book value at December 31, 2010 would be:

A) $14,400 and $43,200.
B) $28,800 and $37,200.
C) $13,200 and $39,600.
D) $13,200 and $45,600.Depreciation, 2010 = ($72,000 6,000) 5 = $13,200 Book value, 12/31/10 = $72,000 (2 13,200) = $45,600

E) A) and B)
F) None of the above

Correct Answer

verified

Show Answer

Question 22

True/False

Review LaterAdd Note

Review Later

Statutory depletion is the maximum amount of depletion that may be reported in financial statements prepared according to GAAP.

A) True
B) False

Correct Answer

verified

Show Answer

Question 23

Multiple Choice

Review LaterAdd Note

Using the double-declining balance method, the book value at December 31, 2010 would be:

Using the straight-line method, depreciation for 2010 and book value at December 31, 2010, would be:

An operational asset should be written down if there has been an impairment of value that is:

In December of 2009, XL Computer's internal auditors discovered that office equipment costing $800,000 was charged to expense in 2007. The asset had an expected life of 10 years with no residual value. XL would have recorded a half year of depreciation in 2007. Required: Prepare the necessary correcting entry that would be made in 2009 (ignore income taxes), and the entry to record depreciation for 2009.

Using the sum-of-the-years'-digits method, depreciation for 2009 and book value at December 31, 2009 would be:

Belotti would record depletion in 2009 of:

Required: Determine the amount, if any, of the goodwill impairment loss that Dooling must recognize on these assets.

Recognition of impairment for tangible operational assets is required if book value exceeds:

Assuming an asset is used evenly over a four-year service life, which method of depreciation will always result in the largest amount of depreciation in the first year?

Required: Compute depreciation for 2009 and 2010 and the book value of the drill press at December 31, 2009 and 2010, assuming the straight-line method is used.

Briefly differentiate between activity-based and time-based allocation methods.

Fellingham Corporation purchased equipment on January 1, 2007, for $200,000. The company estimated the equipment would have a useful life of 10 years with a $20,000 residual value. Fellingham uses the straight-line depreciation method. Early in 2009, Fellingham reassessed the equipment's condition and determined that its total useful life would be only six years in total and that it would have no salvage value. How much would Fellingham report as depreciation on this equipment for 2009?

Using the double-declining balance method, depreciation for 2010 and book value at December 31, 2010, would be:

Depreciation for 2009, using double-declining balance, would be:

Assume the same facts as above, except that the fair value of Oxford (the reporting unit) is $225 million. Required: Determine the amount, if any, of the goodwill impairment loss that Dooling must recognize on these assets.

The legal life of a patent is:

The overriding principle for all depreciation methods is that the method must be:

Canliss Mining uses the retirement method to determine depreciation on its office equipment. During 2007, its first year of operations, office equipment was purchased at a cost of $14,000. Useful life of the equipment averages 4 years and no salvage value is anticipated. In 2009, equipment costing $5,000 was sold for $600 and replaced with new equipment costing $6,000. Canliss would record 2009 depreciation of: