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

A plant asset was purchased on January 1 for $100,000 with an estimated salvage value of $20,000 at the end of its useful life. The current year's Depreciation Expense is $10,000 calculated on the straight-line basis and the balance of the Accumulated Depreciation account at the end of the year is $50,000. The remaining useful life of the plant asset is

Research and development costs which result in a successful product which is patentable are charged to the Patent account.

Engler Company purchases a new delivery truck for $55,000. The sales taxes are $4,000. The logo of the company is painted on the side of the truck for $1,600. The truck license is $160. The truck undergoes safety testing for $290. What does Engler record as the cost of the new truck?

In recording the purchase of a business, goodwill should be recorded for the excess of ______________ over the _______________ of the net assets acquired.

The factor that is not relevant in computing depreciation is

The balance in the Accumulated Depreciation account represents the

The fair value of a plant asset is always the same as its book value.

Nicholson Company purchased equipment on January 1, 2016, for $80,000 with an estimated salvage value of $20,000 and estimated useful life of 8 years. On January 1, 2018, Nicholson decided the equipment will last 12 years from the date of purchase. The salvage value is still estimated at $20,000. Using the straight-line method the new annual depreciation will be:

All of the following are intangible assets except

The four subdivisions for plant assets are

Presented below is information related to plant assets, natural resources, and intangibles at year end on December 31, 2018, for Hanley Company: Instructions Prepare a partial balance sheet for Hanley Company that shows how the above listed items would be presented.

Three factors that affect the computation of periodic depreciation expense are (1) _______________, (2) _______________, and (3) _________________.

The ________________ method of computing depreciation expense results in an equal amount of periodic depreciation throughout the service life of the plant asset.

Quayle Mining Company purchased land containing an estimated 15 million tons of ore at a cost of $4,200,000. The land without the ore is estimated to be worth $600,000. The company expects to operate the mine for 12 years. Buildings costing $600,000 are erected on the site and are expected to last for 25 years. Equipment costing $300,000 with an estimated life of 15 years is installed. The buildings and the equipment possess no salvage value after the mine is closed. During the first year of operations, the mining company mined and sold 2 million tons of ore. Instructions (a) Compute the depletion charge per ton. (b) Compute the depletion expense for the first year. (c) Compute the appropriate first year's depreciation expense for the buildings. (d) Compute the appropriate first year's depreciation expense for the equipment. (e) Prepare journal entries to record depletion and depreciation expenses for the year.

The asset turnover is calculated as total sales divided by ending total assets.

The cost of land does not include

Farr Company purchased a new van for floral deliveries on January 1, 2018. The van cost $56,000 with an estimated life of 5 years and $14,000 salvage value at the end of its useful life. The double-declining-balance method of depreciation will be used. What is the balance of the Accumulated Depreciation account at the end of 2019?

On January 2, 2018, Kerwin Company purchased a patent for $48,000. The patent has an estimated useful life of 25 years and a 20-year legal life. What entry would the company make at December 31, 2018 to record amortization expense on the patent?

The December 31, 2017 balance sheet of Jensen Company showed Equipment of $76,000 and Accumulated Depreciation of $18,000. On January 1, 2018, the company decided that the equipment has a remaining useful life of 6 years with a $4,000 salvage value. Instructions Compute the (a) depreciable cost of the equipment and (b) revised annual depreciation.

Given the following account balances at year end, compute the total intangible assets on the balance sheet of Kepler Enterprises.