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Exam 7: Long-Term Assets

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Question 81

Multiple Choice

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The balance sheet of Hidden Valley Farms reports total assets of $450,000 and $550,000 at the beginning and end of the year,respectively.Net income and sales for the year are $100,000 and $800,000,respectively.What is Hidden Valley's return on assets?

A) 10%.
B) 20%.
C) 160%.

D) A) and B)
E) A) and C)

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Question 82

Multiple Choice

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Nanki Corporation purchased equipment at the beginning of 2018 for $650,000.In 2018 and 2019,Nanki depreciated the asset on a straight-line basis with an estimated useful life of 8 years and a $10,000 residual value.In 2020,due to changes in technology,Nanki revised the useful life to a total of six years (four more years) with zero residual value.What depreciation expense would Nanki record for the year 2020 on this equipment?

A) $108,333.
B) $106,667.
C) $122,500.

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

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Question 83

Multiple Choice

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Return on assets is equal to:

Losses on the sale of long-term assets for cash:

On January 1,2018,Jacob Inc.purchased a commercial truck for $48,000 and uses the straight-line depreciation method.The truck has a useful life of eight years and an estimated residual value of $8,000.On December 31,2019,the truck was exchanged for a new truck valued at $60,000.Jacob received a trade allowance of $35,000 on the exchange with the remaining $25,000 paid in cash.What amount of gain or loss should Jacob Inc.record on December 31,2019?

The balance sheet of Hidden Valley Farms reports total assets of $450,000 and $550,000 at the beginning and end of the year,respectively.Net income and sales for the year are $100,000 and $800,000,respectively.What is Hidden Valley's profit margin?

The purchase of a new cooling system for $150,000 to upgrade an office building owned by the company would be accounted for as:

Bahama Catering purchased a commercial dishwasher by paying cash of $5,000.The dishwasher's fair value on the date of the purchase was $5,600.The company incurred $400 in transportation costs,$300 installation fees,and paid a $200 fine for illegal parking while the dishwasher was being delivered.For what amount will Bahama record the dishwasher?

A word,slogan,or symbol that distinctively identifies a company,product,or service is a:

The replacement of a major component increased the productive capacity of equipment from 10 units per hour to 18 units per hour.The expenditure for the replacement component should be debited to:

We record purchased intangible assets at their original cost plus all other costs necessary to get the asset ready for use.

An impairment loss is equal to the amount by which book value exceeds the fair value of a long-term asset.