Questions from Intermediate Accounting


Q: Explain how estimation of service lives can result in unrealistically high carrying

Explain how estimation of service lives can result in unrealistically high carrying values for fixed assets.

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Q: A depreciation schedule for semi-trucks of Ichiro Manufacturing Company was

A depreciation schedule for semi-trucks of Ichiro Manufacturing Company was requested by your auditor soon after December 31, 2015, showing the additions, retirements, depreciation, and other data aff...

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Q: Khamsah Mining Company has purchased a tract of mineral land for $

Khamsah Mining Company has purchased a tract of mineral land for $900,000. It is estimated that this tract will yield 120,000 tons of ore with sufficient mineral content to make mining and processing...

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Q: Conan O’Brien Logging and Lumber Company owns 3,000 acres of

Conan O’Brien Logging and Lumber Company owns 3,000 acres of timberland on the north side of Mount Leno, which was purchased in 2002 at a cost of $550 per acre. In 2014, O’Brien began sele...

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Q: Bronson Paper Products purchased 10,000 acres of forested timberland in

Bronson Paper Products purchased 10,000 acres of forested timberland in March 2014. The company paid $1,700 per acre for this land, which was above the $800 per acre most farmers were paying for clear...

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Q: Darby Sporting Goods Inc. has been experiencing growth in the demand

Darby Sporting Goods Inc. has been experiencing growth in the demand for its products over the last several years. The last two Olympic Games greatly increased the popularity of basketball around the...

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Q: Roland Company uses special strapping equipment in its packaging business. The

Roland Company uses special strapping equipment in its packaging business. The equipment was purchased in January 2013 for $10,000,000 and had an estimated useful life of 8 years with no salvage value...

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Q: Kohlbeck Corporation, a manufacturer of steel products, began operations on

Kohlbeck Corporation, a manufacturer of steel products, began operations on October 1, 2013. The accounting department of Kohlbeck has started the fixed-asset and depreciation schedule presented on pa...

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Q: On January 1, 2012, a machine was purchased for $

On January 1, 2012, a machine was purchased for $90,000. The machine has an estimated salvage value of $6,000 and an estimated useful life of 5 years. The machine can operate for 100,000 hours before...

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Q: On January 1, 2013, Locke Company, a small machine

On January 1, 2013, Locke Company, a small machine-tool manufacturer, acquired for $1,260,000 a piece of new industrial equipment. The new equipment had a useful life of 5 years, and the salvage value...

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