Exam 9: Reporting and Analyzing Long-Lived Assets

A company sells a plant asset that originally cost $360,000 for $120,000 on December 31, 2022.The accumulated depreciation account had a balance of $180,000 after the current year's depreciation of $30,000 had been recorded.The company should recognize a

Interest may be included in the acquisition cost of a plant asset

A plant asset with a cost of $300,000 and accumulated depreciation of $285,000 is sold for $35,000.What is the amount of the gain or loss on disposal of the plant asset?

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

Vickers Company uses the units-of-activity method in computing depreciation.A new plant asset is purchased for $36,000 that will produce an estimated 110,000 units over its useful life.Estimated salvage value at the end of its useful life is $3,000.What is the depreciation cost per unit?

Which of the following is not classified as an intangible asset on the balance sheet?

When purchasing delivery equipment, sales taxes and motor vehicle licenses should be charged to Equipment.

Ramirez Company acquires land for $240,000 cash.Additional costs are as follow. Ramirez will record the acquisition cost of the land as

Additions and improvements

On July 1, 2022, Linden Company purchased the copyright to Norman Computer Tutorials for $210,000.It is estimated that the copyright will have a useful life of 5 years.The amount of amortization expense recognized for the year 2022 would be

When purchasing land, the costs for clearing, draining, filling, and grading should be charged to a Land Improvements account.

Which of the following is not true of ordinary repairs?

On January 1, a machine with a useful life of five years and a salvage value of $25,000 was purchased for $125,000.What is the depreciation expense for year 2 under straight-line depreciation?

Pearson Company bought a machine on January 1, 2022.The machine cost $180,000 and had an expected salvage value of $30,000.The life of the machine was estimated to be 5 years.The depreciable cost of the machine is

A gain or loss on disposal of a plant asset is determined by comparing the

On January 1, a machine with a useful life of four years and a salvage value of $16,000 was purchased for $80,000.What is the depreciation expense for year 2 under straight-line depreciation?

Foyle Company purchased a new van for floral deliveries on January 1, 2021.The van cost $56,000 with an estimated life of 5 years and $14,000 salvage value at the end of its useful life.The double-declining-balance method of depreciation will be used.What is the balance of the Accumulated Depreciation account at the end of 2022?

Equipment with a cost of $300,000 has an estimated salvage value of $20,000 and an estimated life of 4 years or 10,000 hours.It is to be depreciated by the straight-line method.What is the amount of depreciation for the first full year, during which the equipment was used for 2,700 hours?

A company has the following assets: Buildings and Equipment, The total amount reported under Property, Plant, and Equipment would be

A computer company has $3,500,000 in research and development costs.Before accounting for these costs, the net income of the company is $2,800,000.What is the amount of net income or loss before taxes after these research and development costs are accounted for?