Exam 8: Long-Term and Other Assets

Which of the following matches the correct cost allocation terms with the given assets?

The return on assets (ROA)is the ratio of net income divided by average fixed assets.

A patent is the exclusive right to reproduce and sell a book,musical composition,or film.

Marketable securities that are held until the due date of the securities are:

Spring Creek Mines purchased a vein of mineral ore for $3,250,000.It is estimated that 15,000,000 tons of ore are available to be extracted.The estimated depletion expense for this year's extraction of 1,760,000 tons of ore (rounded to the nearest dollar)is:

Timber,coal,and other minerals are long-term assets called natural resources.

A company replaced tires on a vehicle and debited the amount to Vehicle instead of Repairs and Maintenance Expense.Which of the following would occur because of this error?

GAAP requires that exchanges of assets must be categorized as like-kind or dissimilar assets.

Which of the following would be considered as part of the cost of purchasing an existing building?

An example of an other asset would be a trademark.

Which of the following accounts would be debited in a journal entry for an asset exchange?

The cost of long-term assets must be allocated to an expense as the asset is used up.

A piece of equipment that was originally purchased for $25,000,had accumulated depreciation of $18,000,and was sold for $8,000 would recognize a gain of $1,000.

When an asset is disposed of,the current period's depreciation expense account must be updated to the time of the disposal.

Cesario Corporation purchases a machine for $125,000.It has an estimated salvage value of $10,000 and is expected to produce 50,000 units in its lifetime.During the first year of operation,it produced 14,500 units.To the nearest dollar,the depreciation for the first year under the units of production method will be:

Disposal of a plant asset always occurs after the asset has been fully depreciated.

Which of the following would NOT be considered a fixed asset?

Realized gains and losses only occur when the security is sold for more or less than the original cost.

Charbucks has net income of $50,000,sales of $250,000,beginning fixed assets of $150,000 and ending fixed assets of $200,000.The fixed asset turnover is (rounded)1.4.

Charmed Inc.has net income of $50,000,sales of $250,000,beginning total assets of $150,000 and ending total assets of $200,000.The return on assets is (rounded)33%.