10. True or False Please use T or F to indicate if each statement is true or fal
ID: 2433050 • Letter: 1
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10. True or False Please use T or F to indicate if each statement is true or false T or F When Amazon purchased Zappos, it recorded a significant amount of a. goodwill. Now Amazon must amortize this goodwill ratably over Zappos' useful life Delta spends $4 million cash to obtain landing rights for the next five b. years at Boston's Logan airport. This cash outflow is reported in the operating section of the cash flow statement. Additions, renovations, installation, as well as routine repairs and maintenance costs associated with fixed assets are all capitalized. If Verizon uses an accelerated depreciation method (e.g ?. d. doubledeclining balance) to depreciate equipment for tax reporting, it e.of depreciation recorded over the life of the asset will decrease f. actual repair services are performed. Until then, the company doesn't g. The term future value means the sum of a series of future cash flows. h. An annuily is a stream of cash flows occurring every period that are must also use this method for its public financial reporting If a firm lengthens a fixed asset's estimated useful life, the total amount Standard product warranties expenses should not be recorded until the know which products require warranty repair. equal in amount Dell predominately sells computers to corporate customers who require a three-year standard warranty. HP sells computers under a one-year i. standard warranty primarily to individual consumers. Assuming Dell and HP have identical product quality, Dell should accrue a higher warranty expense for each computer sold For the present value of a single amount, the compounding interval mayExplanation / Answer
a. False, goodwill is no longer amortized as per Financial Accounting Standards Board (FASB) Statement 142, Accounting for Goodwill and Intangible Assets
b. True, Since Delta is in airlines operations, it will be considered as operating expenses.
c. False, routine repairs are not capitalized
d. True, companies can use different methods
e. False, depreciation in total is independent upon the lenght of the asset being used.
f. True, though provisions for the same can be made if expense is probable
g. False, given defination is of present value
h. True, Annuity is a stream of equal cash flows arriving at a regular interval and ending after a specified time period
i. True, false, since their expenses are allocated over three years they may accrue smaller amount
j. False, it can be on daily basis also depending upon the contract.
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