Question 1

The units-of-production method of depreciation charges a varying amount of expense for each period of an asset's useful life depending on its usage.

Accepted Answer

A) True 
 B)False

Question 2

Beauty Company purchased a machine valued at $565,000 on September 1.The equipment has an estimated useful life of eight years or 5.5 million units.The equipment is estimated to have a salvage value of $48,300.Assuming the double declining balance method of depreciation is used,what is depreciation expense that needs to be recorded at the end of the second year?

Accepted Answer

The answer of Beauty Company purchased a machine valued at...

Question 3

The useful life of a plant asset is:

Accepted Answer

A) The length of time it is used productively in a company's operations. 
B) Never related to its physical life. 
C) Its productive life,but not to exceed one year. 
D) Determined by the FASB. 
E) Determined by law. 
A) The length of time it is used productively in a company's operations. 
B) Never related to its physical life. 
C) Its productive life,but not to exceed one year. 
D) Determined by the FASB. 
E) Determined by law.

Question 4

What is depreciation of plant assets? What are the factors to consider in computing depreciation?

Accepted Answer

Depreciation is the process of allocatin

Question 5

Depreciation is the process of allocating the cost of a plant asset to an expense account in the accounting periods benefiting from its use.

Accepted Answer

A) True 
 B)False

Question 6

On January 2,2009,a company purchased a delivery truck for $45,000 cash.The truck had an estimated useful life of seven years and an estimated salvage value of $3,000.The straight-line method of depreciation was used.Prepare the journal entries to record the updating of depreciation and the disposition of the truck on September 1,2013,under each of the following assumptions:
a.The truck and $45,000 cash were given in exchange for a new delivery truck that had a cash price of $60,000.
b.The truck and $40,000 cash were exchanged for a new delivery truck that had a cash price of $60,000.

Accepted Answer

a. @#IMG-DLM&_TB6947_00_TB6947

Question 7

The process of allocating the cost of a natural resource to the period when it is consumed is called _____________________.

Accepted Answer

The answer of The process of allocating the cost of...

Question 8

A company purchased a machine for $970,000.The machine has a useful life of 12 years and a residual value of $4,500.It is estimated that the machine could produce 1,000,000 units over its useful life.In the first year,200,000 units were produced.In the second year,production increased to 300,000 units.Using the units-of-production method,what is the book value of this asset at the end of the second year of operations?

Accepted Answer

A) $482,750 
B) $487,250 
C) $485,000 
D) $291,000 
E) $289,650 
A) $482,750 
B) $487,250 
C) $485,000 
D) $291,000 
E) $289,650

Question 9

During the current year,a company acquired a new computer with a cash price of $12,800 by exchanging an old one on which the company received a $1,500 trade-in allowance (with the balance of $11,300 paid in cash).The old computer cost $9,000 and its accumulated depreciation was $5,500 as of the exchange date.Prepare the journal entry to record the exchange.

Accepted Answer

@#IMG-DLM&_TB6947_00_TB6947_00

Question 10

A company purchased a tract of land for its natural resources at a cost of $1,500,000.It expects to mine 2,000,000 tons of ore from this land.The salvage value of the land is expected to be $250,000.The depletion expense per ton of ore is:

Accepted Answer

A) $0.75 
B) $0.625 
C) $0.875 
D) $6.00 
E) $8.00 
A) $0.75 
B) $0.625 
C) $0.875 
D) $6.00 
E) $8.00

Question 11

Depletion:

Accepted Answer

A) Is the process of allocating the cost of natural resources to periods in which they are consumed. 
B) Is also called depreciation. 
C) Is also called amortization. 
D) Is an unrealized expense reported in equity. 
E) Is the process of allocating the cost of intangibles to periods in which they are used. 
A) Is the process of allocating the cost of natural resources to periods in which they are consumed. 
B) Is also called depreciation. 
C) Is also called amortization. 
D) Is an unrealized expense reported in equity. 
E) Is the process of allocating the cost of intangibles to periods in which they are used.

Question 12

A company purchased a machine for $75,000 that was expected to last six years and have a salvage value of $6,000.At the beginning of the machine's fourth year,the company decided that the machine's estimated useful life should be revised to a total of 10 years instead of 6 years.Also,the salvage value was re-estimated to be $5,500.Straight-line depreciation was used throughout the machine's life.Calculate the depreciation expense for the fourth year of the machine's useful life.

Accepted Answer

@#IMG-DLM&_TB6947_00

Question 13

Total asset turnover is used to evaluate:

Accepted Answer

A) The efficiency of management's use of assets to generate sales. 
B) The need for asset replacement. 
C) The number of times operating assets were sold during the year. 
D) The cash flows used to acquire assets. 
E) The relation between asset cost and book value. 
A) The efficiency of management's use of assets to generate sales. 
B) The need for asset replacement. 
C) The number of times operating assets were sold during the year. 
D) The cash flows used to acquire assets. 
E) The relation between asset cost and book value.

Question 14

On January 2 of the current year,a company purchased a patent for $35,000 with a useful life of 10 years.Prepare the journal entry to amortize the patent at the end of the first year.

Accepted Answer

@#IMG-DLM&_TB6947_00

Question 15

A company purchased a special purpose machine on August 1 of the past year and it was installed and ready to run on January 1 of this year.The following costs were incurred in the purchase and installation of the machine.
Determine the total cost of the machine.

Accepted Answer

@#IMG-DLM&_TB6947_00

Question 16

A method that charges the same amount of expense over each period of the asset's useful life is called:

Accepted Answer

A) Accelerated depreciation. 
B) Declining-balance depreciation. 
C) Straight-line depreciation. 
D) Units-of-production depreciation. 
E) Modified accelerated cost recovery system (MACRS) depreciation. 
A) Accelerated depreciation. 
B) Declining-balance depreciation. 
C) Straight-line depreciation. 
D) Units-of-production depreciation. 
E) Modified accelerated cost recovery system (MACRS) depreciation.

Question 17

A company purchased mining property that containing 15,000,000 tons of ore for $4,875,000.In 2012,the company mined and sold 789,000 tons of ore and in 2013,it mined and sold 1,235,000.Calculate the depletion expense for 2012 and 2013.

Accepted Answer

$4,875,000/15,000,000 tons = $

Question 18

When a company constructs a building,the cost of the building includes materials and labor,design fees,building permits,and insurance during construction.

Accepted Answer

A) True 
 B)False

Question 19

A company purchased mining property for $1,560,000.The property was estimated to contain 13,000,000 tons of ore.In the current year,the company removed and sold 247,000 tons of ore.Calculate the depletion expense for the current year.

Accepted Answer

$1,560,000/13,000,00

Question 20

Dell had net sales of $35,404 million.Its average total assets for the period were $14,502 million.Dell's total asset turnover is equal to:

Accepted Answer

A) 0.40 
B) 0.35 
C) 1.45 
D) 2.44 
E) 3.50 
A) 0.40 
B) 0.35 
C) 1.45 
D) 2.44 
E) 3.50

The units-of-production method of depreciation charges a varying amount of expense for each period of an asset's useful life depending on its usage.

The useful life of a plant asset is:

What is depreciation of plant assets? What are the factors to consider in computing depreciation?

Depreciation is the process of allocating the cost of a plant asset to an expense account in the accounting periods benefiting from its use.

The process of allocating the cost of a natural resource to the period when it is consumed is called _____________________.

A company purchased a tract of land for its natural resources at a cost of $1,500,000.It expects to mine 2,000,000 tons of ore from this land.The salvage value of the land is expected to be $250,000.The depletion expense per ton of ore is:

Depletion:

Total asset turnover is used to evaluate:

On January 2 of the current year,a company purchased a patent for $35,000 with a useful life of 10 years.Prepare the journal entry to amortize the patent at the end of the first year.

A company purchased a special purpose machine on August 1 of the past year and it was installed and ready to run on January 1 of this year.The following costs were incurred in the purchase and installation of the machine. Determine the total cost of the machine.

A method that charges the same amount of expense over each period of the asset's useful life is called:

A company purchased mining property that containing 15,000,000 tons of ore for $4,875,000.In 2012,the company mined and sold 789,000 tons of ore and in 2013,it mined and sold 1,235,000.Calculate the depletion expense for 2012 and 2013.

When a company constructs a building,the cost of the building includes materials and labor,design fees,building permits,and insurance during construction.

A company purchased mining property for $1,560,000.The property was estimated to contain 13,000,000 tons of ore.In the current year,the company removed and sold 247,000 tons of ore.Calculate the depletion expense for the current year.

Dell had net sales of $35,404 million.Its average total assets for the period were $14,502 million.Dell's total asset turnover is equal to:

Introducing Financial Accounting

Accounting System and Financial Statements

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Receivables

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments and International Operations

Accounting for Partnerships

Accounting With Special Journals

Filters

Exam 8: Reporting and Analyzing Long-Term Assets

The units-of-production method of depreciation charges a varying amount of expense for each period of an asset's useful life depending on its usage.

The useful life of a plant asset is:

What is depreciation of plant assets? What are the factors to consider in computing depreciation?

Depreciation is the process of allocating the cost of a plant asset to an expense account in the accounting periods benefiting from its use.

The process of allocating the cost of a natural resource to the period when it is consumed is called _____________________.

A company purchased a tract of land for its natural resources at a cost of $1,500,000.It expects to mine 2,000,000 tons of ore from this land.The salvage value of the land is expected to be $250,000.The depletion expense per ton of ore is:

Depletion:

Total asset turnover is used to evaluate:

On January 2 of the current year,a company purchased a patent for $35,000 with a useful life of 10 years.Prepare the journal entry to amortize the patent at the end of the first year.

A company purchased a special purpose machine on August 1 of the past year and it was installed and ready to run on January 1 of this year.The following costs were incurred in the purchase and installation of the machine. Determine the total cost of the machine.

A method that charges the same amount of expense over each period of the asset's useful life is called:

A company purchased mining property that containing 15,000,000 tons of ore for $4,875,000.In 2012,the company mined and sold 789,000 tons of ore and in 2013,it mined and sold 1,235,000.Calculate the depletion expense for 2012 and 2013.

When a company constructs a building,the cost of the building includes materials and labor,design fees,building permits,and insurance during construction.

A company purchased mining property for $1,560,000.The property was estimated to contain 13,000,000 tons of ore.In the current year,the company removed and sold 247,000 tons of ore.Calculate the depletion expense for the current year.

Dell had net sales of $35,404 million.Its average total assets for the period were $14,502 million.Dell's total asset turnover is equal to:

Introducing Financial Accounting

Accounting System and Financial Statements

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Receivables

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments and International Operations

Accounting for Partnerships

Accounting With Special Journals

Filters