Exam 9: Plant Assets, Natural Resources, and Intangible Assets

Salvage value is not subtracted from plant asset cost in determining depreciation expense under the declining-balance method of depreciation.

If disposal of a plant asset occurs during the year, depreciation is

If a company incurs legal costs in successfully defending its patent, these costs are recorded by debiting

Mather Company purchased equipment on January 1, 2015 at a total invoice cost of $336,000; additional costs of $6,000 for freight and $30,000 for installation were incurred. The equipment has an estimated salvage value of $12,000 and an estimated useful life of five years. The amount of accumulated depreciation at December 31, 2016 if the straight-line method of depreciation is used is:

A company purchases a remote site building for computer operations. The building will be suitable for operations after some expenditures. The wiring must be replaced to computer specifications. The roof is leaky and must be replaced. All rooms must be repainted and recarpeted and there will also be some plumbing work done. Which of the following statements is true?

Which of the following statements concerning IFRS and U.S. GAAP is true?

The cost of a patent must be amortized over a 20-year period.

The calculation of depreciation using the declining balance method,

Eckman Company purchased equipment for $120,000 on January 1, 2014, and will use the double-declining-balance method of depreciation. It is estimated that the equipment will have a 5-year life and a $6,000 salvage value at the end of its useful life. The amount of depreciation expense recognized in the year 2016 will be

The book value of a plant asset is the difference between the

Given the following account balances at year end, compute the total intangible assets on the balance sheet of Kepler Enterprises. Cash \ 1,500,000 Accounts Receivable 4,000,000 Trademarks 1,000,000 Goodwill 3,000,000 Research \& Development Costs 2,000,000

Once cost is established for a plant asset, it becomes the basis of accounting for the asset unless the asset appreciates in value, in which case, market value becomes the basis for accountability.

The amortization period for a patent cannot exceed

Accumulated Depletion

Gagner Clinic purchases land for $175,000 cash. The clinic assumes $1,500 in property taxes due on the land. The title and attorney fees totaled $1,000. The clinic has the land graded for $2,200. What amount does Gagner Clinic record as the cost for the land?

Research and development costs should be charged to expense when incurred.

A company decides to exchange its old machine and $231,000 cash for a new machine. The old machine has a book value of $189,000 and a fair value of $210,000 on the date of the exchange. The cost of the new machine would be recorded at

Which one of the following items is not a consideration when recording periodic depreciation expense on plant assets?

The book value of a plant asset is always equal to its fair market value.

The balance in the Accumulated Depreciation account represents the