Exam 16: Accounting for Property, Plant, Equipment, and Intangible Assets

To record the depletion of natural resources, the most common method is to use the double declining-balance method.

For each of the following, identify in column 1 the category to which the account belongs, in column 2 the normal balance for the account, in column 3 the financial statement that the account in which the account balance is reported, and in column 4 the account's nature (permanent/temporary). -

When an asset is exchanged for a similar asset and a gain results, under accounting rules the gain is:

For each of the following, identify in column 1 the category to which the account belongs, in column 2 the normal balance for the account, in column 3 the financial statement that the account in which the account balance is reported, and in column 4 the account's nature (permanent/temporary). -

Residual value was ignored when originally calculating the units-of-production depreciation. This error would cause:

For each of the following, identify in column 1 the category to which the account belongs, in column 2 the normal balance for the account, in column 3 the financial statement that the account in which the account balance is reported, and in column 4 the account's nature (permanent/temporary). -

A company purchases a patent for $44,000. The patent will be amortized over 5 years. The entry to record the amortization in the first year is:

A company purchased new computer equipment from a local vendor. An employee offered to pick up the equipment and received a speeding ticket on his way back to the office. The cost of the speeding ticket should be charged to the cost of the equipment.

Gains incurred in selling or trading assets are always recognized.

Under MACRS, which of the following classes uses the straight-line method?

Tangible assets include:

Net income is affected by the depreciation method used.

J. Pohl purchased office equipment for $5,000 on January 1, 2017. It has a residual value of $500 with a useful life of 5 years. After the appropriate adjusting entry is made, the book value of the asset on December 31, 2017, under the double declining-balance method, is:

Payments for ordinary maintenance of an asset are called ________.

A plant asset is fully depreciated when the book value is:

Which if the following would NOT be an example of an intangible asset?

For each of the following, identify in column 1 the category to which the account belongs, in column 2 the normal balance for the account, in column 3 the financial statement that the account in which the account balance is reported, and in column 4 the account's nature (permanent/temporary). -

What would be the accumulated depreciation balance at the end of year 5 for a piece of equipment using the straight-line method when the cost is $12,000, residual value is $1,300, and the expected life is 11 years? (Round any intermediate calculations to the nearest cent, and your final answer to the nearest dollar.)

When equipment that is fully depreciated is discarded:

The exclusive right to produce and sell musical work is called a: