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

A company purchased office equipment for $40,000 and estimated a salvage value of $8,000 at the end of its 5-year useful life. The constant percentage to be applied against book value each year if the double-declining-balance method is used is

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

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Moreno Company purchased equipment for $900,000 on January 1, 2017, and will use the double-declining-balance method of depreciation. It is estimated that the equipment will have a 3-year life and a $40,000 salvage value at the end of its useful life. The amount of depreciation expense recognized in the year 2019 will be

On a balance sheet, natural resources may be described more specifically as all of the following except

Conceptually, the cost allocation procedures for natural resources parallels that of plant assets.

All of the following factors in computing depreciation are estimates except

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

In computing depreciation, salvage value is

If a plant asset is sold before it is fully depreciated,

Useful life is expressed in terms of use expected from the asset under the

Hunt Company purchased factory equipment with an invoice price of $90,000. Other costs incurred were freight costs, $1,100; installation wiring and foundation, $2,200; material and labor costs in testing equipment, $700; oil lubricants and supplies to be used with equipment, $500; fire insurance policy covering equipment, $1,400. The equipment is estimated to have a $5,000 salvage value at the end of its 8-year useful service life. Instructions (a) Compute the acquisition cost of the equipment. Clearly identify each element of cost. (b) If the double-declining-balance method of depreciation was used, the constant percentage applied to a declining book value would be __________.

Hull Company acquires land for $86,000 cash. Additional costs are as follows: Hull will record the acquisition cost of the land as

If fully depreciated equipment that cost $10,000 with no salvage value is retired, the entry to record the retirement requires a debit to the ___________________________ account and a credit to the _____________________ account.

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

Eckman Company purchased equipment for $120,000 on January 1, 2017, 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 2019 will be

Wesley Hospital installs a new parking lot. The paving cost $40,000 and the lights to illuminate the new parking area cost $25,000. Which of the following statements is true with respect to these additions?

IFRS allows companies to revalue plant assets to fair value. Which of the following statements is true regarding revaluation?

Which of the following statements is not true when a fully depreciated plant asset is retired?

Depletion expense is reported in the income statement as an operating expense.