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Which of the following is not a characteristic of tangible long-lived assets?

• Productive
• Used over one or more years
• Not intended for resale
• Amortized over their useful lives

Which of the following accurately describes the treatment of ordinary and extraordinary repairs?

• Ordinary repairs are expensed as incurred; extraordinary repairs are expensed as incurred.
• Ordinary repairs are treated as a capital expenditure; extraordinary repairs are expensed as incurred.
• Ordinary repairs are expensed as incurred; extraordinary repairs are treated as a capital expenditure.
• Ordinary repairs are treated as a capital expenditure; extraordinary repairs are treated as a capital expenditure.

Durango, Incorporated purchased a parcel of land for $450,000. It paid attorney fees of $3,000 to verify title to the land. In addition, it paid a broker's fee of $7,500 to help find a suitable parcel of land. This parcel of land should be recorded in the accounting records for:

• $450,000.
• $453,000.
• $460,500.
• $457,500.

Tonto Company purchased property for $120,000. The property included a building, equipment, and land. The building was appraised at $90,000, the land at $59,000, and the equipment at $32,000. What is the amount of cost to be allocated to the building in the accounting records?

• $120,000
• $59,640
• $90,000
• $0

On January 1, 2024, Dunbar Echo Company sells a machine for $26,600. The machine was originally purchased on January 1, 2022, for $48,700. The machine was estimated to have a useful life of 5 years and a residual value of $0. Dunbar Echo uses straight-line depreciation. In recording this transaction:

• a loss of $2,620 would be recorded.
• a gain of $2,620 would be recorded.
• a loss of $22,100 would be recorded.
• a gain of $26,600 would be recorded.

A company purchased a computer system on January 2, 2024, for $1,600,000. The company used the straight-line depreciation method with an estimated useful life of 6 years and a residual value of $130,000. The company prepares financial statements at December 31. Which of the following is correct about the depreciation recorded?

• Accumulated Depreciation will be debited for $266,667.
• The book value of the computer system at December 31, 2024 will be $1,225,000.
• Depreciation expense will be debited for $245,000.
• The depreciable cost of the computer system is $1,600,000.

A trucking company sold its fleet of trucks for $56,000. The trucks originally cost $1,456,000 and had Accumulated Depreciation of $1,279,000 recorded through the date of disposal. What gain or loss did the trucking company record when it sold the fleet of trucks?

• Gain of $121,000.
• Gain of $56,000.
• Loss of $56,000.
• Loss of $121,000.

When a company sells equipment for cash on a date other than the last day of the accounting period, it must:

• record Depreciation Expense for the entire accounting period during which the equipment is sold.
• record the disposal by reducing the Equipment account and increasing a revenue account; a gain or loss is reported if the decrease and increase are not equal.
• first record Depreciation Expense for the period up to the date of sale, and then record the disposal by increasing Cash and decreasing both Equipment and Accumulated Depreciation; a gain or loss is reported if the proceeds from the sale do not equal the asset's book value.
• record Accumulated Depreciation for the entire current accounting period.

Goodwill:

• is not amortized but is tested annually for impairment.
• is amortized using the straight-line method.
• is amortized using the units-of-production method.
• is not amortized and is not tested for impairment.

Which of the following statements is correct?

• Depreciation allocates the cost of tangible assets over their useful lives.
• Depreciation allocates the cost of intangible assets over their useful lives.
• Amortization allocates the cost of tangible assets over their useful lives.
• The term "depreciation" relates to all long-lived assets whereas "amortization" relates only to intangible assets.