Download D102 - Unit 8 test questions with verified solutions 2024-202 and more Exams Biology in PDF only on Docsity! D102 - Unit 8 test questions with verified solutions 2024- 2025 Property, plant, and Equipment (PPE) Tangible, long-lived assets acquired for use in business operations that include land, buildings, machinery, equipment, and furniture Intangible Assets Long-lived assets without physical substance that are used in business that include licenses, patens, franchises, and goodwill Previous Play Next Rewind 10 seconds Move forward 10 seconds Unmute 0:00 / 0:54 Full screen 6 Ways to Show Appreciation for Your Child's Teacher Research An activity undertaken by a company to discover new knowledge that will be useful in developing new products, services, or processes as part of a company's larger (R&D) activities. Development The application of a company's research findings to develop a plan or design for new or improved products and processes as part of a company's larger (R&D) activities. What does it mean to capitalize a cost? To record it as an asset necessary to record this machine purchase? Debit to Machine for $2,000 Debit to Cash for $2,000 Debit to Machine for $10,000 Debit to Notes Payable for $8,000 Debit to Machine for $10,000 On January 1 of Year 1, Corollary Company purchased a machine for $10,000. The machine is expected to have a 10-year useful life and salvage value of $1,000. Assuming that the company uses straight- line depreciation, what is included in the journal entry necessary to record depreciation expense on this machine at the end of Year 1? Debit to Depreciation Expense for $900 Debit to Machine for $900 Debit to Depreciation Expense for $1,000 Debit to Accumulated Depreciation for $1,000 Debit to Depreciation Expense for $900 January 1 of Year 1, Pruhart Company purchased a machine for $20,000. The machine is expected to have a 9-year useful life and salvage value of $2,000. The company uses straight-line depreciation. What is the book value of this machine at the end of Year 6? $6,000 $6,667 $8,000 $10,000 $8,000 Declining-balance depreciation method An accelerated depreciation method in which an asset's book value is multiplied by a constant depreciation rate (such as double the straight-line percentage, in the case of double-declining-balance). Higher depreciation charges in the earlier years of an assets life. MACRS Modified Accelerated Cost Recovery System - Income tax depreciation systm in the US based on declining balance depreciation. Allows taxpayers to quickly deduct the cost of assets acquired. What number is ignored in the computation of declining-balance depreciation in the first year of the asset's life? Salvage value Useful life Asset cost Book value Salvage value What caution needs to be exercised when using a declining-balance depreciation method to compute depreciation expense during the final years of an asset's life? Must decrease the useful life to half the initial number of years Cannot reduce book value below salvage value Cannot report depreciation expense as an expense in the income statement Must increase the useful life to double the initial number of years Cannot reduce book value below salvage value 1 / 1 On January 1 of Year 1, Ridgeland Company purchased a machine for $10,000. The machine is expected to have a 10-year useful life and salvage value of $1,000. company uses straight-line depreciation. At the end of Year 3 (after depreciation expense for the year had been recorded), the machine was sold for $7,000 cash. What is included in the journal entry necessary to record the sale of this machine at the end of Year 3 for $7,000 cash? Credit to Loss for $600 Credit to Machine for $7,600 Debit to Accumulated Depreciation for $2,400 Debit to Accumulated Depreciation for $7,600 Debit to Accumulated Depreciation for $2,400 Intangible Assets Rights and privileges that are long-lived, are not held for resale, have no physical substance, and usually provide their owner with competitive advantages over other firms. Trademark A distinctive name, symbol, or slogan that distinguishes a product or service from similar products or services. Recorded as an asset when legal filings are made or when purchased from another company. How is an internally generated trademark reported on a company's balance sheet? The internally generated trademark is reported at estimated selling price. The internally generated trademark is reported at estimated market value. The internally generated trademark is generally not reported. The internally generated trademark is reported at appraisal value. The internally generated trademark is generally not reported. Jaunty Coffee Co. purchased a trademark from another company for $1,000 cash. What is included in the journal entry necessary to record this trademark purchase? Credit to Trademark for $1,000 Credit to Operating Expense for $1,000 Debit to Operating Expense for $1,000 Debit to Trademark for $1,000 Debit to Trademark for $1,000 Patent An exclusive right granted by the government to the owner of a product, process, or idea. Recorded as an asset when legal filings are made or when purchased from another company. What legal right belongs to the owner of a patent? Right to use a certain symbol or likeness for a specific number of years Right to operate a business of a specified type for a specified number of years Right to use another company's business ideas in conducting business for a specified number of years Right to protection from other companies selling the product for a specified number of years Right to protection from other companies selling the product for a specified number of years Dellberg Company purchased a patent from another company for $10,000 cash. What is included in the journal entry necessary to record this patent purchase? Credit to Patent for $10,000 Credit to Owners' Equity for $10,000 expense on this patent at the end of Year 1? Debit to Patent for $4,000 Debit to Patent for $1,000 Debit to Amortization Expense for $4,000 Debit to Amortization Expense for $1,000 Debit to Amortization Expense for $4,000 What is the proper accounting for most costs associated with developing a patent? Deferred expense Expense Revenue Asset Expense On January 1 of Year 1, Corollary Company purchased a trademark for $20,000. The trademark is expected to have a 10-year economic useful life. As with almost all intangible assets, the trademark is assumed to have zero salvage value at the end of its economic useful life. Assuming that the company uses straight-line amortization, what is included in the journal entry necessary to record amortization expense on this trademark at the end of Year 1? Credit to Amortization Expense for $20,000 Credit to Trademark for $20,000 Credit to Amortization Expense for $2,000 Credit to Trademark for $2,000 Credit to Trademark for $2,000 On January 1 of Year 1, a company purchased a machine for $30,000. The machine is expected to have an eight-year useful life and salvage value of $6,000. Assuming that the company uses double- declining balance depreciation, what is the amount of depreciation expense on this machine for Year 2? 6,000 5,500 7,500 5,625 5,625