McGraw-Hill's Taxation of Individuals and Business Entities 2020 Edition
11th Edition
ISBN: 9781260432466
Author: SPILKER, Brian
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Textbook Question
Chapter 10, Problem 11DQ
If a business places several different assets in service during the year, must it use the same
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Which of the following must be recorded in the accounting records when an asset that is NOT held for sale is derecognized?
A
Removal of the asset.
B
Gain or loss on derecognition.
C
All of the above items must be recorded in the accounting records.
D
Depreciation up until the date of derecognition.
Which of the following statements related to long-lived assets is true?
Depreciation is calculated the same for financial reporting purposes and income tax purposes.
If a company changes a depreciation estimate, it does not require a prior period adjustment.
Depreciation is the process to value an asset at its fair market value.
There is only one test to record an asset's impairment.
Is it permissible to record additional depreciation on the assets, if they are still useful to the business
Chapter 10 Solutions
McGraw-Hill's Taxation of Individuals and Business Entities 2020 Edition
Ch. 10 - Explain why certain long-lived assets are...Ch. 10 - Prob. 2DQCh. 10 - Explain the similarities and dissimilarities...Ch. 10 - Is an assets initial or cost basis simply its...Ch. 10 - Prob. 5DQCh. 10 - Explain why the expenses incurred to get an asset...Ch. 10 - Graber Corporation runs a long-haul trucking...Ch. 10 - What depreciation methods are available for...Ch. 10 - If a business places several different assets in...Ch. 10 - Prob. 38P
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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
- What is the difference between depreciation expense and accumulated depreciation? What two items surprised you that a company is allowed to capitalize? What do you know as reasons a company may choose one deprecation method over another?arrow_forwardWhich of the following would have an effect on the presentation of past years' comparable financial statements? Select one: O a. A component operation of the company is discontinued O b. Revising the estimated life of equipment Oc Correcting an error due to improper revenue recognition O d. Impairment of Goodwill Oe. Using MACRS to compute the depreciation of an asset for tax purposesarrow_forwardUnder what conditions is it appropriate for a businessto use the composite method of depreciation for itsplant assets? What are the advantages and disadvantagesof this method?arrow_forward
- Under U.S. GAAP, in a year in which the fair value of an asset rises, should a company record depreciation expense for that asset? Why?arrow_forwardThere are various types of accounting changes, each of which is required to be reported differently. Required: 1. What type of accounting change is a change from the sum-of-the-years’-digits method of depreciation to the straight-line method for previously recorded assets? Under what circumstances does this type of accounting change occur? 2. What type of accounting change is a change in the expected service life of an asset arising because of more experience with the asset? Under what circumstances does this type of accounting change occur?arrow_forwardWhen a company changes the way it depreciates an asset in midstream, what change would be made to reflect?arrow_forward
- A company fails to capitalize avoidable interest incurred while constructing an asset. What is the effect on net income in the current year and net income in subsequent years (when the asset is depreciated).arrow_forwardWhat is the purpose of charging depreciation in financial statements? A To allocate the cost of a non-current asset over the accounting periods expected to benefit from its use B To ensure that funds are available for the eventual replacement of the asset C To reduce the cost of the asset in the statement of financial position to its estimated market value D To account for the ‘wearing-out’ of the asset over its lifearrow_forwardWhat does the word depreciation means to a business or individual and what are the various types of depreciation methods?arrow_forward
- Which of the following companies has a disclosure for which FASB ASC 450 applies, but FASB ASC 275 does not? O Comfort House has a loss contingency at the financial statement date, and it is remotely A. possible that the estimate for this contingency will change by a material amount within the next year. B. The Garden Foundation has an asset on which the depreciation will be recalculated due to the life of the assets being extended. C. The Summer Group has equipment that will be written down. D. The Winter Group has an intangible asset that needs to be written down.arrow_forwardWhich of the following best describes depreciation? A.ccounts for the market value of a physical asset B.Part of the cost of a physical asset allocated as an expense to each time period in which the asset is used. C.Shows the increase in value of a physical asset over the asset’s useful life D.Shows the drop in value of an asset when the asset is first used by an entityarrow_forward
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