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Testing of new equipment should be included in the initial c…

Testing of new equipment should be included in the initial cost of the equipment on the balance sheet.

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The factors that need to be determined to compute depreciati…

The factors that need to be determined to compute depreciation are an asset’s:

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A gain is recognized on the disposal of an asset when the as…

A gain is recognized on the disposal of an asset when the asset’s book value is greater than the consideration received.

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A company purchased a 3-acre tract of land for a building si…

A company purchased a 3-acre tract of land for a building site for $350,000. The company demolished the old building at a cost of $12,000, but was able to sell scrap from the building for $1,500. The cost of title transfer was $900 and attorney fees for reviewing the contract was $500. Property taxes paid were $3,000, of which $250 covered the period after the purchase date. The capitalized cost of the land is:

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The cost of an intangible asset with a finite useful life is…

The cost of an intangible asset with a finite useful life is amortized.

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Cutter Enterprises purchased equipment for $72,000 on Januar…

Cutter Enterprises purchased equipment for $72,000 on January 1, 2021. The equipment is expected to have a five-year life and a residual value of $6,000.Using the double-declining-balance method, annual depreciation expense for 2022 would be:

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Property, plant, and equipment and intangible assets are lon…

Property, plant, and equipment and intangible assets are long-term, revenue-producing assets.

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The process of allocating the cost of natural resources over…

The process of allocating the cost of natural resources over their useful life is known as:

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Total depreciation is the same over the life of an asset reg…

Total depreciation is the same over the life of an asset regardless of the method of depreciation used.

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An asset was acquired on January 1, 2021, for $78,000 with a…

An asset was acquired on January 1, 2021, for $78,000 with an estimated five-year life and $13,000 residual value. The company uses units-of-production depreciation and expects the asset to produce 20,000 units.  Actual production was: 2021 = 500 units; 2022 = 3,000 units; 2023 = 3,500 units; 2024 = 1,000 units. What amount will the company record for annual depreciation expense in 2023?

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