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

For each of the following sentences , select the word or group of words that best completes the statement. -______________________________ is an account that can only exist if one company purchases another business and the cost exceeds the fair market values of the identifiable net assets at the time acquired.

A revenue expenditure is deducted from the cost of the asset.

Which of the following accounts would not be reported in the Property, Plant, and Equipment section of a balance sheet?

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: -Depreciation expense

Crouch Apartments purchased an apartment building to rent to university students on December 15, 2015.The tenants moved in on January 1, 2016.On Super Bowl Sunday, a student punched a hole in the wall when his favorite team fumbled the ball.It cost the landlord $400 to repair the hole.How should this cost be recorded?

Blanton Company bought equipment on January 1, 2012, with a cost of $160,000, an estimated residual value of $40,000, and an estimated life of 15 years was depreciated by the straight-line method for 4 years.Due to obsolescence, it was determined at the beginning of 2016 that the useful life should be shortened by 3 years and the residual value changed to zero.What is the accumulated depreciation at the end of 2015?

Given the following list of methods of depreciation, select the method that is best for the situation or purpose given.Some answers may be used more than once, while others may not be used at all. -This method minimizes taxable income (early in the asset's life).

If technology changes rapidly, a firm should

Depreciation does not describe the increase or decrease in the market value of the asset.

For each of the following items, indicate whether each would be treated as a -Costs related to acquiring an asset, such as sales or excise taxes, transportation, insurance during shipment

Given the following list of methods of depreciation, select the method that is best for the situation or purpose given.Some answers may be used more than once, while others may not be used at all. -This method is the best for management bonus plans.

How are the cash flow effects from the purchase and sale of intangible assets reported on a statement of cash flows?

All of the following statements are true except:

Wexford Co.purchased a new delivery truck at the beginning of 2016.The truck has a cost of $37,000, an estimated life of 5 years, and an estimated residual value of $7,000.A full year's depreciation expense is to be recorded in 2016.The truck was driven 20,000 miles during 2016 and 24,000 miles during 2017.The number of expected miles over five years is 100,000. ​ -Refer to information for Wexford Co. ​ Wexford's is comparing the straight-line and double-declining-balance depreciation methods.Of these two methods, which method creates the larger expense and larger tax savings in 2016?

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

Exeter Corporation purchased a piece of equipment with a price of $80,000 on March 1, 2018.The amounts below are related to the equipment purchase.Match the items below and explain why each revenue expenditure is not capitalized. -Terms of the purchase were 2/10, net 30.Edison paid for the purchase on March 8.

The accounting life of intangible assets is determined by

A change in estimate should be recorded_________________.

With respect to operating assets, the two different transactions that would appear in the investing activities category of the statement of cash flows are __________________________________ and __________________________________.

Select the account that would be increased to show each of the following costs. -The interest costs incurred during the construction period of a new building built by a company for its own use