Exam 8: Operating Assets: Property, Plant and Equipment, and Intangibles

Royal Company purchased a dump truck at the beginning of 2014 at a cost of $60,000.The truck had an estimated life of 6 years and an estimated residual value of $24,000.On January 1, 2016, the company made major repairs of $20,000 to the truck that extended the life 1 year.Thus, starting with 2016, the truck has a remaining life of 5 years and a new salvage value of $8,000.Royal uses the straight-line depreciation method.What is the book value of the truck to be reported on the balance sheet at December 31, 2016?

Norwood, Inc.purchased a crane at a cost of $80,000.The crane has an estimated residual value of $5,000 and an estimated life of 8 years, or 12,500 hours of operation.The crane was purchased on January 1, 2016 and was used 2,700 hours in 2016 and 2,600 hours in 2017. ​ -Refer to the information about Norwood, Inc. ​ If Norwood uses the straight-line method, what is the book value at December 31, 2018?

Identify where each of the following accounts would be reported on Coca-Cola's financial statements. -Amortization expense

Plant assets are depreciated because

Depreciation has no effect on income taxes, since it only reduces a plant asset's book value.

Eagle's Nest sold equipment for $4,000 cash.This resulted in a $1,500 loss.What is the impact of this sale on the working capital?

Given below is a list of items that may be reported on a statement of cash flows.Identify each as one of the following using the indirect method: -Purchase of equipment for cash

Central National Bank recently acquired a new computer system.Which of the following costs associated with the computer should not be debited to the Equipment account?

Select the financial statement on which the user would most likely find the answer to the question given.(Select all that apply.) -How much depreciation expense did the company report during the year?

On January 1, 2016, Grove City Corp.purchased a ship for $2,000,000.It has a ten-year useful life and a residual value of $50,000.The company uses the double-declining-balance method. ​ -What was the depreciation expense for Grove City Corp.for the year ended December 31, 2016?

Which of the following sets of factors is needed to calculate depreciation on plant and equipment?

Select the account that would be increased to show each of the following costs. -The annual painting costs of an office building

Given below is a list of items that may be reported on a statement of cash flows.Identify each as one of the following using the indirect method: -Cost incurred to acquire a patent

Borden Company incurred the following costs to acquire and prepare land for a new parking lot: purchase price for land, cost to clear the land, cost of paving, lighting for the parking lot, and landscaping for the parking lot.How should the company determine which costs should be recorded as Land Improvements and which cost should be recorded as Land?

Plant assets, current assets, property, plant and equipment, and fixed assets are all tangible assets.

When Carson Real Estate Company sells equipment for a loss, the Loss on Sale of Asset is treated as accumulated depreciation.

Operating assets with no physical properties are called

Acquisition cost is also known as historical cost with respect to property plant and equipment.

At the end of 2016, Mirror Productions determined that one of its copyrights was worthless.The copyright had a cost of $320,000.The copyright had been amortized for 8 years of its estimated 25-year legal life.Which of the following statements is the justification for removing the remaining cost of the copyright from the accounting records?

Select the account that would be increased to show each of the following costs. -The sales taxes paid related to a machine purchased