Asset Acquisition
The term for recording an expenditure as an asset to be expensed over time.
What is Capitalize?
Intangible assets differ from tangible assets because they lack this.
What is physical substance?
This expense allocates the cost of a tangible asset over its useful life.
What is depreciation?
Amortization applies to this type of asset.
Answer: What are intangible assets?
When an asset is no longer useful and has no resale value, it is said to be this.
What is retired?
These assets are physically tangible and actively used in operations.
What are property, plant, and equipment?
The exclusive right to reproduce or sell a creative work
What is a copyright?
This account accumulates total depreciation over an asset’s life and appears on the balance sheet as a contra-asset.
What is Accumulated Depreciation?
The most common method used for amortizing intangible assets.
What is the straight-line method?
Formula to determine gain or loss on disposal.
What is selling price minus book value?
The purchase of multiple assets for one total price is known as this.
What is a basket purchase?
The excess of purchase price over the fair value of net identifiable assets is called this.
What is goodwill?
Name the three factors used to calculate depreciation.
What are cost, residual value, and useful life?
Intangible assets with this kind of life, like patents, are amortized.
What is a definite life?
If a truck’s book value is $19,000 and it’s sold for $22,000, what is the result?
What is a $3,000 gain?
When demolishing an old building before new construction, the demolition cost should be recorded here.
What is Land?
Intangible assets with this type of life are not amortized.
What is indefinite life?
The depreciation method that allocates equal expense each year.
What is the straight-line method?
If Burger Mania buys a $400,000 patent with a 5-year life, what is the annual amortization expense?
What is 80,000?
The correct journal entry to record a $2,000 loss on sale includes a debit to this account.
What is Loss on Sale (Loss+, SE-)?
If land and building are purchased for $400,000 and their appraised values are $175,000 and $325,000, what amount is assigned to the land?
What is 140,000?
Calculate goodwill if a company pays $1,447 million for another firm whose fair value of net assets is $762 million.
What is $685 million?
Tatiana Touring uses an activity-based method for a $1,000,000 stage used for 400 concerts with a $100,000 residual value. What is the depreciation per concert?
What is $2,250 per concert?
This intangible asset is never amortized.
What is goodwill (or trademarks with indefinite life)?
Marvel Studios bought a truck costing $88,200 (after all capitalized costs), sold after 3 years for $40,000, with accumulated depreciation of $41,600. What is the gain or loss?
What is a $6,600 loss?