accounting test #3 ch8 part 1

copyright, patent, trademark

3 examples of a intangible asset

15,160

Corazon Company purchased an asset with a list price of $14,000. Corazon paid $500 of transportation in cost, $800 to train an employee to operate the equipment, and $200 to insure the asset against theft after it has been setup in the factory. The asset was purchased under terms 1/20/n30 and Corazon paid for the asset within the discount period. Based on this information, Corazon would capitalize the asset on its books at

debit equipment, building, land. credit cash (add up equipment/building/land and divide the amount of cash by it)

Sable Co. paid $400,000 cash for a basket purchase that included land, a building, and equipment. An appraiser estimated the market value of the land to be $100,000, the building to be $350,000, and the equipment to be $50,000. Which of the following journal entries could be used to record this event?

over the useful life of the asset

Tangier Company paid cash to purchase a long-term operational asset. The cost of the asset will be expensed (depreciated)

no effect

When double-declining balance depreciation is used for the recognition of depreciation expense, the statement of cash flows will show

false (no gains or losses)

When the total estimated market value of assets acquired in a basket purchase is greater than the cost of the purchase, the company making the purchase must recognize a gain. This statement is

book value

amount of the cost of the asset minus the accumulated depreciation

general rule

any cost that is incurred to obtain the asset or get the asset ready for its intended use is part of the cost of the asset

building, land, gold

3 types of tangible assets

true

A franchise is an intangible asset that provides privileges related to other intangible assets. This statement is

decrease in investing activities (cash decreases and land/building/equipment increase)

Harbor Co. made a basket purchase. Specifically, the Company paid cash to purchase land, a building and equipment. The appraised market value of the individual items was greater that the purchase price. Which of the following shows how this purchase will affect a company's financial statements?

true

Land is different from other tangible assets in that its utility is not diminished by its use. This statement is

40,000

On January 1, Year 1, Marino Moving Company paid $48,000 cash to purchase a truck. The truck was expected to have a four year useful life and an $8,000 salvage value. If Marino uses the double-declining-balance method, the amount of accumulated depreciation shown on the Year 3 balance sheet is

8,000

On January 1, Year 1, Marino Moving Company paid $48,000 cash to purchase a truck. The truck was expected to have a four year useful life and an $8,000 salvage value. If Marino uses the double-declining-balance method, the amount of book value shown on the Year 3 balance sheet is

4,000

On January 1, Year 1, Marino Moving Company paid $48,000 cash to purchase a truck. The truck was expected to have a four year useful life and an $8,000 salvage value. If Marino uses the double-declining-balance method, the amount of depreciation expense recognized on the Year 3 income statement is

increase in accumulate depreciation and expense. Decrease in retained earnings and net income. cash flow not affected

On January 1, Year 1, Marino Moving Company paid $48,000 cash to purchase a truck. The truck was expected to have a four year useful life and an $8,000 salvage value. If Marino uses the double-declining-balance method, which of the following shows how the adjusting entry to recognize depreciation expense at the end of Year 3 will affect the Company's financial statements?

debit depreciation expense (12,000). credit accumulated depreciation (12,000)

On January 1, Year 1, Marino Moving Company paid $48,000 cash to purchase a truck. The truck was expected to have a four year useful life and an $8,000 salvage value. If Marino uses the double-declining-balance method, which of the following shows the adjusting entry necessary to recognize depreciation expense at the end of Year 2?

20,000

On January 1, Year 1, Marino Moving Company paid $48,000 cash to purchase a truck. The truck was expected to have a four year useful life and an $8,000 salvage value. If Marino uses the straight-line method, the amount of accumulated depreciation shown on the Year 2 balance sheet is

28,000

On January 1, Year 1, Marino Moving Company paid $48,000 cash to purchase a truck. The truck was expected to have a four year useful life and an $8,000 salvage value. If Marino uses the straight-line method, the amount of book value shown on the Year 2 balance sheet is

10,000

On January 1, Year 1, Marino Moving Company paid $48,000 cash to purchase a truck. The truck was expected to have a four year useful life and an $8,000 salvage value. If Marino uses the straight-line method, the amount of depreciation expense recognized on the Year 2 income statement is

debit depreciation expense (10,000), credit accumulated depreciation (10,000)

On January 1, Year 1, Marino Moving Company paid $48,000 cash to purchase a truck. The truck was expected to have a four year useful life and an $8,000 salvage value. If Marino uses the straight-line method, what is the journal entry for depreciation expense at the end of Year 2?

increase accumulate depreciation and expenses. decrease equity and net income. cash flows not affected

On January 1, Year 1, Marino Moving Company paid $48,000 cash to purchase a truck. The truck was expected to have a four year useful life and an $8,000 salvage value. If Marino uses the straight-line method, which of the following shows how the adjusting entry to recognize depreciation expense at the end of Year 3 will affect the Company's financial statements?

debit machine (4500), credit cash (4500)

Point Company paid $4,000 cash to purchase a new machine. The company also paid $500 cash for an initial training cost that was necessary to teach an employee how to operate the machine. Which of the following represents the journal entry that would be necessary to record all capitalized costs related to the purchase of the machine?