4. Capital expenditures include the cost of acquiring fixed assets and the cost of improving an
asset. These costs are recorded by increasing (debiting) a fixed asset account. Capital
8. a. An accelerated depreciation method is most appropriate for situations in which the decline
in productivity or earning power of the asset is proportionately greater in the early years of
CHAPTER 10
FIXED ASSETS AND INTANGIBLE ASSETS
DISCUSSION QUESTIONS
10-1
CHAPTER 10 Fixed Assets and Intangible Assets
PE 10–1A
7 Delivery Truck 1,675
PE 10–1B
14 Accumulated Depreciation—Delivery Van 2,300
PE 10–2A
PE 10–2B
PE 10–3A
PE 10–3B
Feb.
PRACTICE EXERCISES
Aug.
10-2
CHAPTER 10 Fixed Assets and Intangible Assets
PE 10–4A
PE 10–4B
PE 10–5A
PE 10–5B
PE 10–6A
10-3
CHAPTER 10 Fixed Assets and Intangible Assets
PE 10–6B
PE 10–7A
PE 10–7B
PE 10–8A
a. Dec. 31 Loss from Impaired Goodwill 4,000,000
PE 10–8B
a. Dec. 31 Loss from Impaired Goodwill 6,000,000
PE 10–9A
a. Fixed Asset Turnover:
Net sales……………………………
…
2014 2013
$5,510,000 $4,880,000
10-5
CHAPTER 10 Fixed Assets and Intangible Assets
PE 10–9B
a. Fixed Asset Turnover:
Revenue……………………………
…
2014 2013
$1,668,000 $1,125,000
10-6
CHAPTER 10 Fixed Assets and Intangible Assets
Ex. 10–1
Ex. 10–2
Ex. 10–3
EXERCISES
10-7
CHAPTER 10 Fixed Assets and Intangible Assets
Ex. 10–6
Mar. 20 Accumulated Depreciation—Delivery Truck 1,890
Cash 1,890
10-8
CHAPTER 10 Fixed Assets and Intangible Assets
Ex. 10–11
a. Depreciation Rate per Mile:
Miles Operated
21,000
b. Depreciation Expense—Trucks 18,980
Ex. 10–12
Second Year
First Year
Credit to
$ 5,460
Rate per Mile Depreciation
Accumulated
Truck No.
1
$0.26
10-9
CHAPTER 10 Fixed Assets and Intangible Assets
Ex. 10–14
Ex. 10–15
Ex. 10–16
a. Apr. 30 Carpet 18,000
Ex. 10–17
a. Cost of equipment……………………………………………………………………………
…
$420,000
…
b. (1) Depreciation Expense—Equipment 19,500
*$104,000 + $19,500 = $123,500
10-10
CHAPTER 10 Fixed Assets and Intangible Assets
Ex. 10–18
a. 2011 depreciation expense: $55,800 [($714,000 – $44,400) ÷ 12]
c. Cash 525,000
Ex. 10–19
Ex. 10–20
10-11
CHAPTER 10 Fixed Assets and Intangible Assets
Ex. 10–21
a. Property, Plant, and Equipment (in millions):
Current Preceding
Year Year
Land and buildings…………………………………………………
…
$1,471 $ 955
b. We would expect Apple’s book value of fixed assets to increase during the
Ex. 10–22
10-12
…
CHAPTER 10 Fixed Assets and Intangible Assets
Ex. 10–23
Ex. 10–24
b. RadioShack’s fixed asset turnover ratio of 16.09 is higher than Best Buy’s
Appendix Ex. 10–25
10-13
CHAPTER 10 Fixed Assets and Intangible Assets
Appendix Ex. 10–26
a. Price (fair market value) of new equipment………………………
…
$275,000
Trade-in allowance of old equipment………………………………
…
90,000
Appendix Ex. 10–27
a. Depreciation Expense—Equipment 6,000
Appendix Ex. 10–28
a. Depreciation Expense—Trucks 5,250
10-14
…
…
…
…
CHAPTER 10 Fixed Assets and Intangible Assets
Prob. 10–1A
1. Land Other
Item Land Improvements Building Accounts
a. $ 2,500
3. Since land used as a plant site does not lose its ability to provide services, it is
4. Since Land Improvements are depreciated, depreciation expense of $1,200
PROBLEMS
10-15
CHAPTER 10 Fixed Assets and Intangible Assets
Prob. 10–2A
1.
a. Straight- b. Units-of- c. Double-
Line Output Declining-Balance
Year Method Method Method
2012 $ 40,500 $ 58,050 $ 90,000
3. Over the three-year life of the equipment, all three depreciation methods yield
Depreciation Expense
10-16
CHAPTER 10 Fixed Assets and Intangible Assets
Prob. 10–3A
a. Straight-line method:
b. Units-of-output method:
c. Double-declining-balance method:
2012: $270,000 × 2/3 × 9/12……………………………………………………… $135,000
10-17