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

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Ordinary repairs should be recognized when incurred as revenue expenditures.

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Depletion expense is computed by multiplying the depletion cost per unit by the

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Goodwill is not recognized in accounting unless it is acquired from purchasing another business enterprise.

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To qualify as natural resources in the accounting sense, assets must be

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The depreciation method that applies a constant percentage to depreciable cost in calculating depreciation is

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Costs incurred to increase the operating efficiency or useful life of a plant asset are referred to as

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On July 1, 2015, Hale Kennels sells equipment for $220,000. The equipment originally cost $600,000, had an estimated 5-year life and an expected salvage value of $100,000. The accumulated depreciation account had a balance of $350,000 on January 1, 2015, using the straight-line method. The gain or loss on disposal is

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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 book value of the plant asset on the December 31, 2015, balance sheet assuming that Holt Company uses the double-declining-balance method of depreciation?

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The cost of a purchased building includes all of the following except

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In an exchange of plant assets that has commercial substance, any difference between the fair value and the book value of the old plant asset is

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The units-of-activity method is generally not suitable for

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In computing depletion, salvage value is

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Sargent Corporation bought equipment on January 1, 2015. The equipment cost $360,000 and had an expected salvage value of $60,000. The life of the equipment was estimated to be 6 years. Assuming straight-line deprecation, the book value of the equipment at the beginning of the third year would be

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Natural resources are generally shown on the balance sheet under

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Copyrights are granted by the federal government

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Research and development costs

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Land improvements should be depreciated over the useful life of the

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The cost of successfully defending a patent in an infringement suit should be

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A plant asset cost $90,000 when it was purchased on January 1, 2008. It was depreciated by the straight-line method based on a 9-year life with no salvage value. On June 30, 2015, the asset was discarded with no cash proceeds. What gain or loss should be recognized on the retirement?

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All of the following factors in computing depreciation are estimates except

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