Exam 7: Reporting and Analyzing Liabilities and Stockholders Equity

Equipment costing $280000 was destroyed when it caught on fire.At the date of the fire the accumulated depreciation on the equipment was $112000.An insurance check for $320000 was received based on the replacement cost of the equipment.Recording the insurance proceeds and the disposition of the equipment will include a(n)

Grant Company has decided to change the estimate of the useful life of an asset that has been in service for 2 years.Which of the following statements describes the proper way to revise a useful life estimate?

Recording depreciation on plant assets affects the balance sheet and the income statement.

All of the following statements about the useful life factor associated with depreciation are true except

The Land account would include all of the following costs except

Which one of the following items is not considered a part of the cost of a truck purchased for business use?

Given the following account balances at year end compute the total intangible assets on the balance sheet of Janssen Enterprises. Cash \ 1,500,000 Accounts Receivable 1,000,000 Trademarks 1,200,000 Goodwill 2,500,000 Research \& Development Costs 2,000,000

During 2022 Ronald Corporation reported net sales of $2000000 net income of $900000 and depreciation expense of $100000.Ronald also reported beginning total assets of $1000000 ending total assets of $1500000 plant assets of $800000 and accumulated depreciation of $500000.Ronald's asset turnover is

The Modified Accelerated Cost Recovery System (MACRS) is a depreciation method that

Which of the following is not an intangible asset that is reported on the balance sheet?

The declining-balance method of depreciation produces a(n)

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

A computer company has $3500000 in research and development costs.Before accounting for these costs the net income of the company is $2800000.What is the amount of net income or loss before taxes after these research and development costs are accounted for?

An asset that cannot be sold individually in the marketplace is

The following information is provided for Nguyen Company and Northwest Corporation. (in \ millions) Nquyen Company Northwest Corporation Net income 2022 \ 165 \ 420 Net sales 2022 1,650 4,900 Total assets 12/31/20 1,000 2,400 Total assets 12/31/21 1,050 3,000 Total assets 12/31/22 1,150 4,000 What is Northwest's return on assets for 2022?

Accountants do not attempt to measure the change in a plant asset's market value during ownership because

In 2022 Blanchard Corporation has plant equipment that originally cost $120000 and has accumulated depreciation of $48000.A new processing technique has rendered the equipment obsolete so it is retired.Which of the following should Blanchard do to record the retirement of the equipment?

Management should select the depreciation method that

A company purchased factory equipment on June 1 2022 for $128000.It is estimated that the equipment will have a $8000 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 2022 is

Whyte Clinic purchases land for $420000 cash.The clinic assumes $4500 in property taxes due on the land.The title and attorney fees totaled $3000.The clinic had the land graded for $6600.What amount does Whyte Clinic record as the cost for the land?