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

Mehring Company reported net sales of $540,000, net income of $72,000, beginning total assets of $240,000, and ending total assets of $360,000. What was the company's asset turnover?

If a fully depreciated plant asset is still used by a company, the

A company purchased office equipment for $40,000 and estimated a salvage value of $8,000 at the end of its 5-year useful life. The constant percentage to be applied against book value each year if the double-declining-balance method is used is

Which depreciation method is most frequently used in businesses today?

Kahn Mining Company purchased a mine for $60 million which is estimated to have 250,000 tons of ore and a salvage value of $10 million. (a) In the first year, 50,000 tons of ore are extracted and sold. Prepare the journal entry to record depletion expense for the first year. (b) In the second year, 150,000 tons of ore are extracted but only 125,000 tons are sold. Prepare the journal entry to record depletion expense for the second year. (c) What amount and in what account are the tons of ore not sold reported?

Which of the following statements concerning financial statement presentation is not a true statement?

Grayson's Lumber Mill sold two machines in 2019. The following information pertains to the two machines: Instructions (a) Compute the depreciation on each machine to the date of disposal. (b) Prepare the journal entries in 2019 to record 2019 depreciation and the sale of each machine.

The asset turnover is computed by dividing

Goodwill can be recorded

Wesley Hospital installs a new parking lot. The paving cost $40,000 and the lights to illuminate the new parking area cost $25,000. Which of the following statements is true with respect to these additions?

Once cost is established for a plant asset, it becomes the basis of accounting for the asset unless the asset appreciates in value, in which case, market value becomes the basis for accountability.

Jack's, a popular pizza hang-out, has a thriving delivery business. Jack's has a fleet of three delivery automobiles. Prior to making the entry for this year's depreciation expense, the subsidiary ledger for the fleet is as follows: Instructions (a) Determine the depreciation rates per mile for each car. (b) Determine the depreciation expense for each car for the current year. (c) Make one compound journal entry to record the annual depreciation expense for the fleet.

Yanik Company's delivery truck, which originally cost $84,000, was destroyed by fire. At the time of the fire, the balance of the Accumulated Depreciation account amounted to $57,000. The company received $48,000 reimbursement from its insurance company. The gain or loss as a result of the fire was

Ordinary repairs which maintain operating efficiency and expected productive life are called _______________.

The entry to record depletion expense

212. Santayana Company purchased a machine on January 1, 2016, for $60,000 with an estimated salvage value of $15,000 and an estimated useful life of 8 years. On January 1, 2018, Santayana decides the machine will last 12 years from the date of purchase. The salvage value is still estimated at $15,000. Using the straight-line method, the new annual depreciation will be

On January 2, 2015, Olathe Company purchased a patent for $240,000. The patent has an 8-year estimated useful life and a legal life of 20 years. Instructions Prepare the journal entry to record patent amortization.

Using the following data for Renfro, Inc., compute its asset turnover.

A plant asset originally cost $64,000 and was estimated to have a $4,000 salvage value at the end of its 5-year useful life. If at the end of three years, the asset was sold for $12,000, and had accumulated depreciation recorded of $36,000, the company should recognize a ______________ on disposal in the amount of $____________.