Question

154 Chapter 10 (2 13. The process of transferring the cost of natural resources to an expense ассount. M14. Long-term assets that are useful in the operations of a business, are not held for sale, and are without physical qualities. A 15. The periodic transfer of the cost of an intangible asset to expense. L 16. An intangible asset that is created from such favorable factors as location, product quality, reputation, and manageriat skill. 17. Exclusive rights to produce and sell goods with one or more unique features. 18. An exclusive right to publish and sell a literary, artistic, or musiçal composition. 19. Aname, term, or symbol used to identify a business and its products. n 20. A financial ratio that provides a measure indicating the ability of a company to generate revenues from its fixed assets. FILL IN THE BLANK-PART A Instructions: Answer the following questions or complete the statements by writing the appropriate words or amounts in the answer blanks. 1. Long-term or relatively permanent tangible assets that are used in the normal business operation are called Xed 2. Surveying fees incurred in connec assets. with securing title of land for use by a business is debited to the account. 3. The cost of a special foundation incurred in connection with the acquisition of a secondhand machine would be debited to the Pquipment account. 4. The estimated value of a fixed asset at the end of its useful life is called value. of actvity 5. The Ut- of depreciation that provides for depreciation expense based on the expected productive capacity of a fixed asset. 6. The cost of a fixed asset minus accumulated.depreciation on the asset is called the anoK method is a method value. 7. A useful life of 4 years is equivalent to a straight-line depreciation rate of 8. Equipment acquired on the first day of the current fiscal year for $50,000 has an estimated tife of 4 years or 25,000 hours and a residual vetue of $5,000. Depreciation for the current year using the straight-fine method is

Answer 1

7) Straight-line depreciation rate = 1/ useful life = 1/ 4 x 100 = 25%

8) Depreciation for the current year = ($50,000 - $5000)/4 years = $11,250 per year.