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

During 2015, Stein Corporation reported net sales of $5,000,000 and net income of $2,100,000. Stein also reported beginning total assets of $1,000,000 and ending total assets of $1,500,000. Stein's asset turnover is

The asset turnover is calculated as total sales divided by ending total assets.

Paneling the body of an open pickup truck would be classified as a(n)

Under the double-declining-balance method, the depreciation rate used each year remains constant.

On July 1, 2015, Jenks Company purchased the copyright to Jackson Computer tutorials for $324,000. It is estimated that the copyright will have a useful life of 5 years with an estimated salvage value of $24,000. The amount of Amortization Expense recognized for the year 2015 would be

The cost of natural resources is not allocated to expense because the natural resources are replaceable only by an act of nature.

On October 1, 2015, Holt Company places a new asset into service. The cost of the asset is $120,000 with an estimated 5-year life and $30,000 salvage value at the end of its useful life. What is the depreciation expense for 2015 if Holt Company uses the straight-line method of depreciation?

A company purchased factory equipment on June 1, 2015, for $160,000. It is estimated that the equipment will have a $10,000 salvage value at the end of its 10-year useful life. Using the straight-line method of depreciation, the amount to be recorded as depreciation expense at December 31, 2015, is

When constructing a building, a company is permitted to include the acquisition cost and certain interest costs incurred in financing the project.

A machine with a cost of $480,000 has an estimated salvage value of $30,000 and an estimated useful life of 5 years or 15,000 hours. It is to be depreciated using the units-of-activity method of depreciation. What is the amount of depreciation for the second full year, during which the machine was used 5,000 hours?

Kingston Company purchased a piece of equipment on January 1, 2015. The equipment cost $200,000 and had an estimated life of 8 years and a salvage value of $25,000. What was the depreciation expense for the asset for 2016 under the double-declining-balance method?

The asset turnover is computed by dividing

If an acquired franchise or license has an indefinite life, the cost of the asset is not amortized.

Grimwood Trucking purchased a tractor trailer for $171,500. Interline uses the units-of-activity method for depreciating its trucks and expects to drive the truck 1,000,000 miles over its 12-year useful life. Salvage value is estimated to be $24,500. If the truck is driven 90,000 miles in its first year, how much depreciation expense should Grimwood record?

The book value of an asset will equal its fair market value at the date of sale if

Which of the following statements concerning financial statement presentation is not a true statement?

The entry to record depletion expense

Losses on an exchange of plant assets that has commercial substance are

Natural resources are

Henson Company incurred $600,000 of research and development costs in its laboratory to develop a new product. It spent $90,000 in legal fees for a patent granted on January 2, 2015. On July 31, 2015, Henson paid $60,000 for legal fees in a successful defense of the patent. What is the total amount that should be debited to Patents through July 31, 2015?