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Exam 9: Plant Assets, natural Resources, and Intangibles

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Question 81

True/False

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The useful life of a plant asset is the length of the service period expected from the asset.

A) True
B) False

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Question 82

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Which of the following depreciation methods allocate a varying amount of depreciation to expense each year based on an asset's usage?

A) the straight-line method
B) the annuity method
C) the units-of-production method
D) the double-declining-balance method

E) B) and D)
F) None of the above

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Question 83

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When a company makes an accounting change in estimate,Generally Accepted Accounting Principles require that the company make changes to financial statements of prior years.

McArthur,Inc.plans to develop a shopping center.In the first quarter,the following amounts were spent: What amount should be recorded as the land improvements cost?

A trademark should not be amortized over its useful life.

Which of the following is a characteristic of a plant asset,such as a building?

Depletion expense should not be recorded for natural resources because they do not decrease in value over time.

Provide definitions for the following terms. 1.Capitalize 2.Revenue Expenditure 3.Depreciation

Businesses record goodwill ________.

On January 1,2017 Hilldale,Inc.had total assets of $368,000.During the year,the company purchased new machinery worth $89,000 and promised to pay the amount due after two years.Throughout the year,it earned revenue of $56,000 every month.Calculate the asset turnover ratio.

The cost principle requires a business to record the assets acquired,or services received,at their actual cost.

The cost of an asset is $1,020,000,and its residual value is $160,000.Estimated useful life of the asset is five years.Calculate depreciation for the second year using the double-declining-balance method of depreciation.(Do not round any intermediate calculations,and round your final answer to the nearest dollar. )

Routing Solutions paid $210,000 to acquire Tabletz,Inc. ,an electronic gadget-advertising website.At the time of the acquisition,Tabletz's balance sheet reported total assets of $210,000 and liabilities of $105,000.The fair market value of Tabletz's assets was $210,000.The fair market value of its liabilities was $105,000.How much goodwill did Routing Solutions purchase as part of the acquisition of Tabletz?

A photocopier cost $105,000 when new and has accumulated depreciation of $96,000.If the business discards this plant asset,the result is ________.

Danube Corp.purchased a used machine for $21,000.The machine required installation costs of $6000 and insurance while in transit of $1800.At which of the following amounts would the machine be recorded?

The type of intangible asset related to the exclusive right to reproduce and sell a book or intellectual property is a ________.

On January 1,2018,Dalton Manufacturing Corporation purchased a machine for $40,000,000.The corporation expects to use the machine for 24,000 hours over the next six years.The estimated residual value of the machine at the end of the sixth year is $40,000.The corporation used the machine for 3,600 hours in 2018 and 5,000 hours in 2019.Calculate depreciation expense for 2019 if the company uses the units-of-production method of depreciation.

Land and land improvements are one and the same and therefore must be recorded in single account.

Great Plains Corporation has acquired a property that included both land and a building for $500,000.The corporation paid cash.The corporation hired an appraiser who has determined that the market value of the land is $300,000 and that of the building is $400,000.Journalize the lump-sum purchase.Omit explanation.(Round any intermediate calculations to two decimal places,and your final answer to the nearest dollar. )

A coal mine cost $1,001,000 and is estimated to hold 58,000 tons of coal.There is no residual value.During the first year of operations,5000 tons are extracted and sold.Calculate depletion per unit.(Round your answer to the nearest cent. )