Exam 9: Property, Plant, and Equipment, Intangible Assets and Natural Resources

After March 2004 international standards required that goodwill

Land and a warehouse were acquired for $89,000,000. What amounts should be recorded in the accounting records for land and for the warehouse if an appraisal showed the estimated values to be $40,000,000 for the land and $70,000,000 for the warehouse?

On 2 March 2013, Glen Industries purchased two automobiles at a cost of $550,000. The cars are to be depreciated by the straight-line method over five years with no salvage value. Glen uses the half-year convention to compute depreciation for fractional periods. The book value of the two automobiles at 31 December 2014 will be:

Mayer Instrumentation sold a depreciable asset for cash of $300,000. The original cost of the asset was $1,200,000. Mayer recognized a gain of $45,000 on the sale. What was the amount of accumulated depreciation on the asset at the time of its sale?

Machinery acquired new on 1 January at a cost of $80,000 was estimated to have a useful life of 10 years and a residual salvage value of $20,000. Straight-line depreciation was used. On 1 January, following six full years of use of the machinery, management decided that the estimate of useful life had been too long and that the machinery would have to be retired after three years, that is, at the end of the ninth year of service. Under this revised estimate, the depreciation expense for the seventh year of use would be:

Glouchester Associates sold office equipment for cash of $142,000. The accumulated depreciation at date of sale amounted to $138,000, and a gain of $18,000 was recognized on the sale. The original cost of the asset must have been:

The erroneous recording of a revenue expenditure as a capital expenditure will cause an overstatement of total revenue for the period.