Exam 7: Reporting and Analyzing Liabilities and Stockholders Equity

Equipment that cost $144000 and on which $120000 of accumulated depreciation has been recorded was disposed of for $36000 cash.Recording this event would include a(n)

Shaffer Company acquires land for $77000 cash.Additional costs are as follows. Removal of shed \ 300 Filling and grading 1,500 Salvage value of lumber of shed 120 Broker commission 1,130 Paving of parking lot 10,000 Closing costs 560 Shaffer will record the acquisition cost of the land as

Burke Company purchases land for $180000 cash.Burke assumes $5000 in property taxes due on the land.The title and attorney fees totaled $2000.Burke has the land graded for $4400.They paid $20000 for paving of a parking lot.What amount does Burke record as the cost for the land?

A company sells a plant asset that originally cost $375000 for $125000 on December 31 2022.The accumulated depreciation account had a balance of $150000 after the current year's depreciation of $37500 had been recorded.The company should recognize a

Land improvements are generally charged to the Land account.

Hopson Company incurred $900000 of research and development costs in its laboratory to develop a new product.It spent $120000 in legal fees for a patent granted on January 2 2022.On July 31 2022 Hopson paid $90000 for legal fees in a successful defense of the patent.What is the total amount of the increase to Patents through July 31 2022?

Carpino Company purchased equipment and these costs were incurred: Cash price \ 75,000 Sales taxes 3,500 Insurance during transit 750 Installation and testing 1,500 Total costs \ 80,750 What amount should be recorded as the cost of the equipment?

A plant asset was purchased on January 1 for $75000 with an estimated salvage value of $15000 at the end of its useful life.The current year's depreciation expense is $5000 calculated on the straight-line basis and the balance of the Accumulated Depreciation account at the end of the year is $35000.The remaining useful life of the plant asset is

Expenditures that maintain the operating efficiency and expected productive life of a plant asset are generally

The asset turnover is calculated as net sales divided by ending total assets.

A company purchased land for $350000 cash.Real estate brokers' commission was $25000 and $35000 was spent for demolishing an old building on the land before construction of a new building could start.Under the historical cost principle the cost of land would be recorded at

Intangible assets

On July 1 2022 Linden Company purchased the copyright to Norman Computer Tutorials for $210000.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

All of the following are factors that a company should consider before an impairment write-down of an asset is recorded except

Which of the following would not be included in the Equipment account?

Research and development costs

Trademarks are generally shown on the balance sheet under

Which depreciation method is most frequently used in businesses today?

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

A plant asset was purchased on January 1 for $55000 with an estimated salvage value of $5000 at the end of its useful life.The current year's depreciation expense is $5000 calculated on the straight-line basis and the balance of the Accumulated Depreciation account at the end of the year is $25000.The remaining useful life of the plant asset is