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

*Dolan Company exchanges equipment with Eaton Company and Pawnee Company exchanges equipment with Fiero Company. The following information pertains to the exchanges: Instructions Prepare the journal entries to record the exchanges on the books of Dolan Company and Pawnee Company. The transaction has commercial substance.

On July 4, 2018, Wyoming Mining Company purchased the mineral rights to a granite deposit for $1,600,000. It is estimated that the recoverable granite will be 400,000 tons. During 2018, 100,000 tons of granite was extracted and 60,000 tons were sold. The amount of the Depletion Expense recognized for 2018 would be

All of the following are intangible assets except

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, 2018. On July 31, 2018, 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, 2018?

Using the units-of-activity method of depreciating factory equipment will generally result in more depreciation expense being recorded over the life of the asset than if the straight-line method had been used.

Bell Company and Kene Company exchanged trucks on January 1, 2015. Bell's truck cost $140,000, had accumulated depreciation of $115,000, and has a fair value of $15,000. Kene's truck cost $105,000, had accumulated depreciation of $90,000, and has a fair value of $15,000. Instructions (a) Journalize the exchange for Bell Company. (b) Journalize the exchange for Kene Company.

The asset turnover is computed by dividing

Three factors that affect the computation of periodic depreciation expense are (1) _______________, (2) _______________, and (3) _________________.

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

A change in the estimated salvage value of a plant asset requires a restatement of prior years' depreciation.

Gorman Mining invested $960,000 in a mine estimated to have 1,200,000 tons of ore with no salvage value. During the first year, 200,000 tons of ore were mined and sold. Instructions Prepare the journal entry to record depletion expense.

Given the following account balances at year end, compute the total intangible assets on the balance sheet of Kepler Enterprises.

Natural resources have two distinguishing characteristics (1) they are physically _______________ in operations, and (2) they are _________________ only by an act of nature.

Sargent Corporation bought equipment on January 1, 2018. 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. The depreciation expense using the straight-line method of depreciation is

The calculation of depreciation using the declining balance method,

If a mining company extracts 1,500,000 tons in a period but only sells 1,200,000 tons,

Nicklaus Company has decided to sell one of its old machines on June 30, 2018. The machine was purchased for $200,000 on January 1, 2014, and was depreciated on a straight-line basis for 10 years with no salvage value. If the machine was sold for $65,000, what was the amount of the gain or loss recorded at the time of the sale?

Natural resources are