Knowledge Check 01A company purchases a machine for $10,000. The estimated residual value is $4,000, and the estimated service life is 4 years or 10,000 units. Thecompany uses the straight-line method of depreciation. The depreciable cost of the asset is:Multiple ChoiceO$1,000$1,500$6,000$10,000

The straight line method of depreciation is charged as a fixed amount of depreciation is deducted…

Answered: The depreciable cost of the asset is:

Business

Accounting

The depreciable cost of the asset is:

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: The difference between book value of the asset with the proceeds receive from its sale, with result…

A: Assets: It refers to the economic value of all resources owned by the business at a given point in…

Q: The book value of a depreciable asset is A. The original cost of the asset. B. The…

A: Book value of a depreciable asset means value at which that asset is shown in the balance sheet of…

Q: Demonstrates the difference between depreciation costs as expenses and the cash flow generated by…

A: Depreciation expense: Depreciation expense is a non-cash expense, which is recorded on the income…

Q: With depreciation, the book value of a fixed asset usually ___ __ ___ with the asset's market value

A: Introduction: - Depreciation is a non-cash expense. Depreciation is charged on fixed asset over a…

Q: Which of the following amounts would be used in calculating a lessee's right of use asset (ROU)? ) O…

A: A lease is a contractual agreement between two parties, the lessor (owner) and the lessee (user),…

Q: practice, would you expect the depreciation expense for a non-current asset to be overestimated or…

A: Depreciation is charged for non current asset being tangible asset, because of its wearing and tear…

Q: what is Intangible Asset ? what is Wasting Assets ? what is Asset Cost ? what is Residual…

A: In the world of finance and accounting, there are key concepts that businesses use to manage their…

Q: A To adjust CAPEX for taxable income B To isolate changes due to buying or selling of CAPEX C To…

A: The net capital expenditures are the difference between capital investments and depreciation, and…

Q: Depreciation represents a __________ in the value of fixed assets.

A: Fixed assets are those type of assets which are being held by the business for longer period of…

Q: Residual value is: A. Also called residual value. B. Also called scrap value. C. An estimate of the…

A: The depreciation expense is charged on fixed assets as reduced value of the fixed asset with usage…

Q: Do I have to include depreciation when computing net present value?

A: Depreciation is said to be none cash expense so there is no out flow of cash when depreciation…

Q: Describe to Stan what it means to capitalize an expenditure. What is the general rulefor determining…

Q: A capital expenditure would be: Group of answer choices added to the cost of the asset ignored…

A: The Capital expenditure is that expenditure which is incurred for long term benefits. The benefits…

Q: Over what period should an addition to an existing long-lived asset be depreciated?Explain.

Q: What is meant by depreciable base? How is it determined?

A: Depreciable base: The word depreciable base is used to depict the value that is divided by the…

Q: ‘carrying value’ of a depreciable asset is the difference between

A: Carrying value of an asset gives value of Company's asset as on given date after provision of wear…

Q: The book value of an asset is computed as the asset's _____.

A: The assets can be defined as fixed assets and current assets.

Q: Instead of valuing assets, depreciation is a cost allocation procedure. This statement should be…

A: This question tells about depreciation is a cost allocation procedure:

Q: Why is the cost of certain kinds of property not recoverable at all by way of de-preciation,…

A: Cost of some assets are not recoverable because of the main reason that these assets do not qualify…

Q: Discuss the factors that influence the estimation of service life for a depreciable asset.

A: Fixed asset:It refers to the long-term assets having a useful life of more than a year which is,…

Q: The following terms are mismatched with its definitions. Match the terms to its correct definitions.…

A: The terms are matched with the definitions in below table:

Q: Preparing an asset for sale after its useful life is a: a. Maintenance support cost b. Production…

A: Introduction: Cost Accounting: Cost Accounting is for Internal users. For determining costs of the…

Q: A cost that is recorded as an asset is ________. Group of answer choices an operating expenditure…

A: The objective of the question is to identify the type of expenditure that is recorded as an asset in…

Q: Why FASB treat the spending on the search and development as expense why it can’t be treated as long…

A: Accounting Principles: Accounting principles are the regulations and criteria that businesses must…

Q: Is residual value deductible when using accelerated method of depreciation>

A: The accelerated method of depreciation includes double declining balance method, 150% declining…

Q: The depreciable amount is also called the _________________. Select one alternative: carrying…

A: Depreciable amount is the cost of an asset minus its residual value.

Q: An asset is said to be fully depreciated when:

A: An provided economic benefit these are creating value of addition story enhance the profit…

Q: Assuming interest costs related to an asset qualify for interest capitalization, which of the…

A: Option 4 is correct The amount that should be capitalised is the lower of actual interest cost…

Q: Salvage value is always deducted from the total capitalizable cost to get the depreciable cost. What…

A: Depreciation means the loss in value of assets because of usage of assets , passage of time or…

Q: (Multiple Choice Question) Amortizable Cost refers to 1. An asset's Net Book Value minus its…

A: Amortizable cost refers to that cost of a fixed asset which has to be charged as an expense either…

Q: e amortized cost for a financial asset

A: Amortized cost is the amount at which financial assets are reported on Balance Sheet.

Q: The key difference between amortization and depreciation is that amortization charges off the cost…

A: In this question, we are required to determine the key difference between depreciation and…

Q: The cost of a depreciable asset is referred to as the

A: The Answer :

Q: 1. How do we decide whether to capitalize (record as an asset) or expense a particular cost? 2.…

A: ANSWER Cost: The cost of the long-lived assets refers to all the expenditures made in order to…

Question

Knowledge Check 01
A company purchases a machine for $10,000. The estimated residual value is $4,000, and the estimated service life is 4 years or 10,000 units. The
company uses the straight-line method of depreciation. The depreciable cost of the asset is:
Multiple Choice
O
$1,000
$1,500
$6,000
$10,000

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Introduction

VIEW

Step 2: Solution

VIEW

Solution

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Section 179 Deduction and Modified Accelerated Cost Recovery System (MACRS) Depreciation

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Gains and losses arising from the retirement or disposal of an item of property, plant and equipment shall be determined as the difference between * Gross disposal proceeds and the cost of the asset Gross disposal proceeds and the carrying amount of the asset Net disposal proceeds and the cost of the asset Net disposal proceeds and the carrying amount of the asset
Cost of property asset minus the residual value is equal to net book value. T/F
The difference between book value of the asset with the proceeds received from its sale, will result in:
What is the 'carrying amount of a depreciating non-current asset? O A. The cost (or fair value) of the asset less the accumulated depreciation on that asset O B. The current market value of the asset C. The cost (or fair value) of the asset less the current year's depreciation O D. The cost (or fair value) of the asset
In all cases, net property, plant and equipment (PP&E) should be calculated as the gross PP&E less the accumulated depreciation. Choices: True or False
How do we decide whether to capitalize (record as an asset) or expense a particular cost?
It is the initial cost of acquiring an asset, plus sales tax, transportation and normal costs of making asset serviceable. a. Adjusted standard cost O b. Cost basis O c. Standard cost O d. Adjusted cost basis
The asset's recoverable value is calculated in accordance with IFRS as
The depletion expense is
Why certain long-lived assets are depreciated (amortized)?
What should be the pattern of amortization for a limited-life intangible?
Why is the cost of certain kinds of property not recoverable at all by way of depreciation, depletion, or amortization deductions? In addition to answering that question, give three examples of the kinds of assets that are not subject to “cost recovery”.