period.structures, due to passage of time.one where equal payments are made at the end of each payment period starting from the firstthe decrease in the value of property such as machinery, cars equipments, building or otheris one where payment periods extend forever or in which the periodic payments continue indefinitely.the worth of a property as shown in the accounting records of an enterprise.the length of time at which property can be operated at a profit.the price of a property when sold for junk.the total amount invested on the property until the property is put into operation.payment occurs later than at the beginning of each period.

An annuity is a set of equal monetary payments made at equidistant periods in time, such as monthly,…

Answered: period. structures, due to passage of…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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What is book value (or net book value) of plant and equipment and on which financial statement is it reported? Book value is the difference between Accumulated Depreciation and market value, and it is reported on the income statement. Book value is the difference between historical cost and Accumulated Depreciation, and it is reported on the balance sheet. Book value is the difference between Depreciation Expense and Accumulated Depreciation, and it is reported on the balance sheet. Book value is the difference between historical cost and market value, and it is reported on the balance sheet.
The purpose of the depreciation adjustment is to: -spread the cost invested in an asset over its useful life. -show the current market value of the asset. -set up a reserve fund for purchasing a new asset. -expense the full amount of the asset in the year purchased.
Accounting When you dispose of a property and end up with a gain or a loss, it may be treated in one of 2 ways. What are they? When you dispose of personal-use property, you usually do not have a capital gain. Why not? To calculate any capital gain or loss, you need to know the following 3 amounts: the proceeds of disposition the adjusted cost base (ACB) the outlays and expenses incurred to sell your property Using these three amounts, what is the formula to calculate your capital gain or loss? 4. Capital Gains are reported on Schedule 3. What line does the sale of Personal Use Property go on?
A gain or loss on the sale of a plant asset is determined by comparing the: A. Asset's original cost with the sales proceeds B. Asset's book value with the sales proceeds C. Asset's original cost with the asset's book value. D. Initial estimate of the asset's salvage value with the sales proceeds. E. None of these.
When Accumulated depreciation account is credited with the amount of depreciation a. The cost of Fixed asset increases b. The cost of Fixed asset remains the same c. The cost of Fixed asset decreases d. The depreciation account decreases
Which of the following are includable to the cost of property and equipment? Transportation costs on machinery purchased under terms FOB shipping point Interest on loans borrowed to purchase an equipment Installation costs and cost of trial runs of a machinery Repairs on broken glass windows of a purchased buildings prior to occupancy
answer quickly
Which of the following is true? O The book value at the end of an asset's useful life will be the same under all the depreciation methods allowed under generally accepted accounting principles. The annual depreciation expense will usually differ under the various depreciation methods. The total depreciation in the accumulated depreciation account will be the same at the end of the asset's useful life under all the methods allowed under generally accepted accounting principles. O All are true.
Fair value as a method of asset measurement is defined as: Multiple Choice O O the cost of an asset adjusted for the depreciation or amortization accumulated over its lifetime. price that would be received to sell assets in an orderly transaction between market participants on a given date. the net amount of cash into which an asset could be converted in the ordinary course of business. the value of what is given in exchange for the asset at its initial acquisition.
Depreciation is the allocation of the cost of a plant asset over its useful life in a rational and systematic manner. The asset being depreciated remains at historical cost and the accumulated depreciation account serves as a contra account to lower the asset balance on the books. Question: Explain why this lowered value is, or is not, the market value of the asset in any given accounting period. Support your answer with examples explaining your choice.
Allocating the cost of a natural resource to the units removed is called amortization. True False 2.Costs incurred to acquire long-lived assets are capital expenditures. True False 3.Accumulated depreciation, as used in accounting, may be defined as: o An expense of doing business. o Funds (or cash) set aside to replace the asset being depreciated. o portion of the cost of plant asset recognized as expense since asset was acquired. o Earnings retained in the business.4. On January 1, 1999, Ubot Inc. purchased a piece of equipment for $60,000. It is estimated to have an economic life of 5 years and a salvage value of $10,000. The 200% declining-balance method for depreciation is used. What is the book value of the asset at the end of year 2000 ? A. o $24,000 B. o $40,000 C. o $36,000 D. o $21,600 5.It is not necessary to disclose the maturity dates of long-term obligations on the financial statements. True False 6.The…
Choose the appropriate definition for each term. Term Long-lived assets Capitalization of cost Units-of-production method Definition Assets that will be used for more than a year. How expenses are reported in the income statement. A depreciation method that produces higher amounts of depreciation expense in the early years of an asset's life and lower amounts in the later years. Carrying value Asset impairment loss Depreciation

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