Question 1

Intellectual property assets are:

Accepted Answer

A)  depreciated. 
B)  depleted. 
C)  amortized. 
D)  expensed. 
A)  depreciated. 
B)  depleted. 
C)  amortized. 
D)  expensed.

Question 2

Hello Online disposed of a van that cost $26,000 with accumulated depreciation of $19,000. The journal entry would include a:

Accepted Answer

A)  credit to Van $26,000. 
B)  debit to Accumulated Depreciation $19,000. 
C)  debit to Loss on Disposal of Plant Asset $7,000. 
D)  All of these answers are correct. 
A)  credit to Van $26,000. 
B)  debit to Accumulated Depreciation $19,000. 
C)  debit to Loss on Disposal of Plant Asset $7,000. 
D)  All of these answers are correct.

Question 3

A coal mine was acquired for $2,000,000. No salvage value was expected and the number of tons of coal is estimated to be 1,000,000 tons. During for first year, 100,000 tons of coal was mined and sold. The first year depletion expense is:

Accepted Answer

A)  $1,000,000. 
B)  $100,000. 
C)  $2,000,000. 
D)  $200,000. 
A)  $1,000,000. 
B)  $100,000. 
C)  $2,000,000. 
D)  $200,000.

Question 4

Prepare journal entries for the following for Bo, Inc.
May 11 Replaced the engine in a Van #1, paying cash of $6,500.
May 18 Paid cash for a tune-up of the engine in Van #2 of $600.
May 29 Paid cash to add a lift to Van #2 of $4,200

Accepted Answer

The answer of Prepare journal entries for the following for...

Question 5

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).
-

Accepted Answer

The answer of For each of the following, identify in...

Question 6

Myers Corporation exchanged an old machine costing $18,000, with an accumulated depreciation of $15,000, and cash of $5,000 for a new machine cash price of $22,000. What is the journal entry?

Accepted Answer

A)  Debit Machinery $20,000; debit Accumulated Depreciation $15,000; credit Machinery $18,000; credit Cash $14,000 
B)  Debit Machinery $17,000; debit Accumulated Depreciation $15,000; credit Gain on Disposal of Plant Asset $3,000; credit Machinery $18,000; credit Cash $17,000 
C)  Debit Machinery $22,000; debit Accumulated Depreciation $15,000; credit Machinery $18,000; credit Cash $5,000; credit Gain on Disposal $14,000 
D)  None of these answers is correct. 
A)  Debit Machinery $20,000; debit Accumulated Depreciation $15,000; credit Machinery $18,000; credit Cash $14,000 
B)  Debit Machinery $17,000; debit Accumulated Depreciation $15,000; credit Gain on Disposal of Plant Asset $3,000; credit Machinery $18,000; credit Cash $17,000 
C)  Debit Machinery $22,000; debit Accumulated Depreciation $15,000; credit Machinery $18,000; credit Cash $5,000; credit Gain on Disposal $14,000 
D)  None of these answers is correct.

Question 7

Revenue expenditures do NOT include:

Accepted Answer

A)  additions to existing plant assets. 
B)  changing tires on a car. 
C)  changing oil in a car. 
D)  All of the above are revenue expenditures. 
A)  additions to existing plant assets. 
B)  changing tires on a car. 
C)  changing oil in a car. 
D)  All of the above are revenue expenditures.

Question 8

What would the book value be at the end of year 6 for a piece of equipment using the straight-line method when cost is $8,000, residual value is $1,400, and the expected life is 11 years? (Round any intermediate calculations to the nearest cent, and your final answer to the nearest dollar.)

Accepted Answer

A)  $3,636 
B)  $3,600 
C)  $4,400 
D)  $3,000 
A)  $3,636 
B)  $3,600 
C)  $4,400 
D)  $3,000

Question 9

A computer server system, which had cost $250,000 and had accumulated depreciation of $170,000, was traded for a new system with a fair market value of $245,000. The old system and cash of $210,000 were given for the new system. Prepare the journal entry for the exchange of these similar assets assuming the income tax method is used to record the exchange.

Accepted Answer

The answer of A computer server system, which had cost...

Question 10

Expenditures for changing oil in a machine or repainting a car would be:

Accepted Answer

A)  added to the cost of the asset. 
B)  added as a capital expenditure. 
C)  charged to an expense account. 
D)  added as a betterment. 
A)  added to the cost of the asset. 
B)  added as a capital expenditure. 
C)  charged to an expense account. 
D)  added as a betterment.

Question 11

Land Improvements is an asset account that records improvements to land that have a limited life.

Accepted Answer

A) True 
 B)False

Question 12

On January 1, 201X, Maxwell Company bought a patent for $60,000. Its estimated useful life is six years. Record the amortization for the first two years.

Accepted Answer

The answer of On January 1, 201X, Maxwell Company bought...

Question 13

A gain on disposal of an asset is listed as:

Accepted Answer

A)  a liability on the balance sheet. 
B)  an asset on the balance sheet. 
C)  other expense on the income statement. 
D)  other income on the income statement. 
A)  a liability on the balance sheet. 
B)  an asset on the balance sheet. 
C)  other expense on the income statement. 
D)  other income on the income statement.

Question 14

A depreciation method that allocates depreciation of a plant asset based on the Tax Act of 1989 is the:

Accepted Answer

A)  straight-line method. 
B)  units-of-production method. 
C)  modified accelerated cost recovery method. 
D)  double declining-balance method. 
A)  straight-line method. 
B)  units-of-production method. 
C)  modified accelerated cost recovery method. 
D)  double declining-balance method.

Question 15

Budgeting for items such as equipment and furniture would be considered:

Accepted Answer

A)  capital expenses. 
B)  capital expenditures. 
C)  general expenses. 
D)  general expenditures. 
A)  capital expenses. 
B)  capital expenditures. 
C)  general expenses. 
D)  general expenditures.

Question 16

For tax purposes, equipment is depreciated using the straight-line method under MACRS.

Accepted Answer

A) True 
 B)False

Question 17

The cost of a plant asset did NOT include installation costs that were expensed. This error would cause:

Accepted Answer

A)  the period's net income to be overstated. 
B)  the period's net income to be understated. 
C)  the period's end assets to be understated. 
D)  Both B and C are correct. 
A)  the period's net income to be overstated. 
B)  the period's net income to be understated. 
C)  the period's end assets to be understated. 
D)  Both B and C are correct.

Question 18

Corbin Corporation has a plant asset with a cost of $44,000 that is traded for a similar asset priced at $74,000. Assuming accumulated depreciation of $19,000 and a trade-in allowance of $14,000, what is the cost basis for the new asset?

Accepted Answer

A)  $44,000. 
B)  $107,000. 
C)  $93,000. 
D)  $74,000. 
A)  $44,000. 
B)  $107,000. 
C)  $93,000. 
D)  $74,000.

Question 19

If a plant asset is fully depreciated and discarded, no ________ or ________ will be realized.

Accepted Answer

The answer of If a plant asset is fully depreciated...

Question 20

A capital expenditure is recorded in an equity account.

Accepted Answer

A) True 
 B)False

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

Intellectual property assets are:

Hello Online disposed of a van that cost $26,000 with accumulated depreciation of $19,000. The journal entry would include a:

A coal mine was acquired for $2,000,000. No salvage value was expected and the number of tons of coal is estimated to be 1,000,000 tons. During for first year, 100,000 tons of coal was mined and sold. The first year depletion expense is:

Prepare journal entries for the following for Bo, Inc. May 11 Replaced the engine in a Van #1, paying cash of $6,500. May 18 Paid cash for a tune-up of the engine in Van #2 of $600. May 29 Paid cash to add a lift to Van #2 of $4,200

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). -

Myers Corporation exchanged an old machine costing $18,000, with an accumulated depreciation of $15,000, and cash of $5,000 for a new machine cash price of $22,000. What is the journal entry?

Revenue expenditures do NOT include:

What would the book value be at the end of year 6 for a piece of equipment using the straight-line method when cost is $8,000, residual value is $1,400, and the expected life is 11 years? (Round any intermediate calculations to the nearest cent, and your final answer to the nearest dollar.)

Expenditures for changing oil in a machine or repainting a car would be:

Land Improvements is an asset account that records improvements to land that have a limited life.

On January 1, 201X, Maxwell Company bought a patent for $60,000. Its estimated useful life is six years. Record the amortization for the first two years.

A gain on disposal of an asset is listed as:

A depreciation method that allocates depreciation of a plant asset based on the Tax Act of 1989 is the:

Budgeting for items such as equipment and furniture would be considered:

For tax purposes, equipment is depreciated using the straight-line method under MACRS.

The cost of a plant asset did NOT include installation costs that were expensed. This error would cause:

Corbin Corporation has a plant asset with a cost of $44,000 that is traded for a similar asset priced at $74,000. Assuming accumulated depreciation of $19,000 and a trade-in allowance of $14,000, what is the cost basis for the new asset?

If a plant asset is fully depreciated and discarded, no ________ or ________ will be realized.

A capital expenditure is recorded in an equity account.

Accounting Concepts and Procedures

Debits and Credits: Analyzing and Recording Business Transactions

Beginning the Accounting Cycle

The Accounting Cycle Continued

The Accounting Cycle Completed

Banking Procedure and Control of Cash

Calculating Pay and Payroll Taxes: the Beginning of the Payroll Process

Paying, Recording, and Reporting Payroll and Payroll Taxes:

Sales and Cash Receipts

Purchases and Cash Payments

Preparing a Worksheet for a Merchandise Company

Completion of the Accounting Cycle for a Merchandise Company

Accounting for Bad Debts

Notes Receivable and Notes Payable

Accounting for Merchandise Inventory

Partnership

Corporations: Organizations and Stock

Corporations: Stock Values, Dividends, Treasury Stocks,

Corporations and Bonds Payable

Statement of Cash Flows

Analyzing Financial Statements

The Voucher System

Departmental Accounting

Manufacturing Accounting

Filters

If a plant asset is fully depreciated and discarded, no or will be realized.