Question 1

Natural resources are reported on the balance sheet at cost plus accumulated depletion.

Accepted Answer

A) True 
 B)False

Question 2

Goodwill is the amount by which a company's value exceeds the value of its individual assets and liabilities.

Accepted Answer

A) True 
 B)False

Question 3

Define plant assets and identify the four primary issues in accounting for them.

Accepted Answer

Plant assets are tangible assets used in

Question 4

January 2010,Giant Green Company pays $3,000,000 for a tract of land with two buildings on it.It plans to demolish Building 1 and build a new store in its place.Building 2 will be a company office; it is appraised at $742,000,with a useful life of 25 years and a $75,000 salvage value.A lighted parking lot near Building 1 has improvements (Land Improvements 1)valued at $400,500 that are expected to last another 18 years with no salvage value.Without the buildings and improvements,the tract of land is valued at $2,020,600.Giant Green also incurs the following additional costs:
$\begin{array}{llr}
  \text { Cost to demolish Building 1 } &\$400,200\
 \text {Cost of additional land grading  } &200,000\
 \text {Cost to construct new building (Building 3), having a useful life of 25  } &\
 \text {years and a  \$ 322,000 salvage value  } &3,851,000\
 \text { Cost of new land improvements (Land Improvements 2) near Building 2 } &\
 \text { having a 20 -year useful life and no salvage value } &122,000\
\end{array}$

What is the amount that should be recorded for Building #1?

Accepted Answer

A)  $600,200 
B) $742,000 
C) $667,000 
D) $380,100 
E) $487,921 
A)  $600,200 
B) $742,000 
C) $667,000 
D) $380,100 
E) $487,921

Question 5

Extraordinary repairs:

Accepted Answer

A) Are revenue expenditures 
B) Extend an asset's useful life beyond its original estimate 
C) Are credited to accumulated depreciation 
D) Are additional costs of plant assets that do not materially increase the asset's life 
E) Are expensed as incurred 
A) Are revenue expenditures 
B) Extend an asset's useful life beyond its original estimate 
C) Are credited to accumulated depreciation 
D) Are additional costs of plant assets that do not materially increase the asset's life 
E) Are expensed as incurred

Question 6

An assets' cost includes all normal and reasonable expenditures necessary to get the asset in place and ready for its intended use.

Accepted Answer

A) True 
 B)False

Question 7

A company purchased equipment valued at $825,000 on January 1.The equipment has an estimated useful life of seven years or six million units.The equipment is estimated to have a salvage value of $35,000.Assuming the straight-line method of depreciation,what is the annual depreciation for the second year if .5 million units were produced?

Accepted Answer

(825,000-

Question 8

Match between columns
                        Premises:    Units-of production method 
   Ordinary repairs 
   Depletion 
   Accelerated depreciation 
   Revenue expenditure 
   Goodwill 
   Change in accounting estimate 
   Total asset turnover 
   Betterment 
   Intangible assets

Accepted Answer

The Answer of  A measure of a company's ability is...

Question 9

Plant assets are assets that are held for sale.

Accepted Answer

A) True 
 B)False

Question 10

Natural resources are often called wasting assets because they are physically consumed when used.

Accepted Answer

A) True 
 B)False

Question 11

A company purchased equipment valued at $200,000 on January 1.The equipment has an estimated useful life of six years or five million units.The equipment is estimated to have a salvage value of $13,400.Assuming the straight-line method of depreciation,what is the annual depreciation for the second year if 1.5 million units were produced?

Accepted Answer

A)  $41,445.91 
B) $62,137.80 
C) $31,100.00 
D) $55,980.00 
E) $33,333.00 
A)  $41,445.91 
B) $62,137.80 
C) $31,100.00 
D) $55,980.00 
E) $33,333.00

Question 12

The total depreciation expense over an asset's useful life will be identical across all methods of depreciation.

Accepted Answer

A) True 
 B)False

Question 13

On September 1,2010,Drill Far Company purchased a tract of land for $2,300,000.The land is estimated to have a salvage value or $50,000,a useful life of four years,and contain an estimated 4,234,000 tons of iron ore.The company also purchased equipment to use in the extraction process that cost $220,450.The company plans to abandon the equipment when the ore is completely mined.During 2010,the company extracted and sold 1.25 million tons of ore.What is the depletion expense recorded for 2010?

Accepted Answer

A) $575,000 
B) $679,027 
C) $664,250 
D) $562,500 
E) $600,000 
A) $575,000 
B) $679,027 
C) $664,250 
D) $562,500 
E) $600,000

Question 14

A company purchased mining property that containing 15,000,000 tons of ore for $4,875,000.In 2009,the company mined and sold 789,000 tons of ore and in 2010,it mined and sold 1,235,000.Calculate the depletion expense for 2009 and 2010.

Accepted Answer

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

Question 15

A company purchased a plant asset for $45,000.The asset has an estimated salvage value of $6,000 and an estimated useful life of 10 years.The annual depreciation expense using the straight-line method is equal to $3,900 per year.

Accepted Answer

A) True 
 B)False

Question 16

______________ is the process of systematically allocating the cost of an intangible asset to expense over its estimated useful life.

Accepted Answer

The answer of ______________ is the process of systematically allocating...

Question 17

A company purchased a POS cash register on January 1 for $5,400.This register has a useful life of 10 years and a salvage value of $400.What would be the depreciation expense for the second-year of its useful life using the double-declining-balance method?

Accepted Answer

A) $500 
B) $800 
C) $864 
D) $1,000 
E) $1,080 
A) $500 
B) $800 
C) $864 
D) $1,000 
E) $1,080

Question 18

A company purchased a rope braiding machine for $190,000.The machine has a useful life of 8 years and a residual value of $10,000.It is estimated that the machine could produce 750,000 units of climbing rope over its useful life.In the first year,105,000 units were produced.In the second year,production increased to 109,000 units.Using the units-of-production method,what is the amount of depreciation that should be recorded for the second year?

Accepted Answer

A) $25,200 
B) $26,160 
C) $26,660 
D) $27,613 
E) $53,160 
A) $25,200 
B) $26,160 
C) $26,660 
D) $27,613 
E) $53,160

Question 19

A company purchased equipment on July 3 of the current year and placed it in service on August 1.The following costs were incurred in acquiring the equipment:
Determine the amount to be recorded as cost for the equipment.
 $$\begin{array} { | l | r | } 
\hline \text { Purchase (invoice) price } & \$ 215,600 \
\hline \text { Transportation } & 1,400 \
\hline \text { Insurance during shipping } & 200 \
\hline \text { One-year fire insurarice begiruing Aupust I of the curent year } & 1,200 \
\hline \text { Installation cost } & 4,500 \
\hline \text { Raw materials and direct labor used to test the equipment } & 1,500 \
\hline
\end{array}$$

Accepted Answer

\[\begin{array} { | l | r | } 
\hline \t

Question 20

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

Natural resources are reported on the balance sheet at cost plus accumulated depletion.

Goodwill is the amount by which a company's value exceeds the value of its individual assets and liabilities.

Define plant assets and identify the four primary issues in accounting for them.

Extraordinary repairs:

An assets' cost includes all normal and reasonable expenditures necessary to get the asset in place and ready for its intended use.

Plant assets are assets that are held for sale.

Natural resources are often called wasting assets because they are physically consumed when used.

The total depreciation expense over an asset's useful life will be identical across all methods of depreciation.

A company purchased mining property that containing 15,000,000 tons of ore for $4,875,000.In 2009,the company mined and sold 789,000 tons of ore and in 2010,it mined and sold 1,235,000.Calculate the depletion expense for 2009 and 2010.

A company purchased a plant asset for $45,000.The asset has an estimated salvage value of $6,000 and an estimated useful life of 10 years.The annual depreciation expense using the straight-line method is equal to $3,900 per year.

______________ is the process of systematically allocating the cost of an intangible asset to expense over its estimated useful life.

A company purchased a POS cash register on January 1 for $5,400.This register has a useful life of 10 years and a salvage value of $400.What would be the depreciation expense for the second-year of its useful life using the double-declining-balance method?

The useful life of a plant asset is:

Introducing Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing 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

Investments and International Operations

Reporting and Analyzing Partnerships

Reporting and Preparing Special Journals

Filters

Exam 8: Reporting and Analyzing Long-Term Assets

Natural resources are reported on the balance sheet at cost plus accumulated depletion.

Goodwill is the amount by which a company's value exceeds the value of its individual assets and liabilities.

Define plant assets and identify the four primary issues in accounting for them.

Extraordinary repairs:

An assets' cost includes all normal and reasonable expenditures necessary to get the asset in place and ready for its intended use.

Plant assets are assets that are held for sale.

Natural resources are often called wasting assets because they are physically consumed when used.

The total depreciation expense over an asset's useful life will be identical across all methods of depreciation.

A company purchased mining property that containing 15,000,000 tons of ore for $4,875,000.In 2009,the company mined and sold 789,000 tons of ore and in 2010,it mined and sold 1,235,000.Calculate the depletion expense for 2009 and 2010.

A company purchased a plant asset for $45,000.The asset has an estimated salvage value of $6,000 and an estimated useful life of 10 years.The annual depreciation expense using the straight-line method is equal to $3,900 per year.

______________ is the process of systematically allocating the cost of an intangible asset to expense over its estimated useful life.

A company purchased a POS cash register on January 1 for $5,400.This register has a useful life of 10 years and a salvage value of $400.What would be the depreciation expense for the second-year of its useful life using the double-declining-balance method?

The useful life of a plant asset is:

Introducing Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing 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

Investments and International Operations

Reporting and Analyzing Partnerships

Reporting and Preparing Special Journals

Filters