Question 1

The following information is provided for Nguyen Company and Northwest Corporation.   What is Northwest's asset turnover ratio for 2014?

Accepted Answer

A)  1.17 times 
B)  1.05 times 
C)  1.52 times 
D)  1.03 times 
A)  1.17 times 
B)  1.05 times 
C)  1.52 times 
D)  1.03 times

Question 2

Carpino Company purchased equipment and these costs were incurred:   What amount should be recorded as the cost of the equipment?

Accepted Answer

A)  $70,000. 
B)  $73,500. 
C)  $74,250. 
D)  $75,750. 
A)  $70,000. 
B)  $73,500. 
C)  $74,250. 
D)  $75,750.

Question 3

In computing depreciation, salvage value is

Accepted Answer

A)  the fair value of a plant asset on the date of acquisition. 
B)  subtracted from accumulated depreciation to determine the plant asset's depreciable cost. 
C)  an estimate of a plant asset's value at the end of its useful life. 
D)  ignored in all the depreciation methods. 
A)  the fair value of a plant asset on the date of acquisition. 
B)  subtracted from accumulated depreciation to determine the plant asset's depreciable cost. 
C)  an estimate of a plant asset's value at the end of its useful life. 
D)  ignored in all the depreciation methods.

Question 4

Prepare the journal entries to record the following transactions for Reese Company, which has a calendar year end and uses the straight-line method of depreciation.
(a) On September 30, 2014, the company sold old equipment for $46,000. The equipment was purchased on January 1, 2012, for $96,000 and was estimated to have a $16,000 salvage value at the end of its 5-year life. Depreciation on the equipment has been recorded through December 31, 2013.
(b) On June 30, 2014, the company sold old equipment for $24,000. The equipment originally cost $36,000 and had accumulated depreciation to the date of disposal of $15,000.

Accepted Answer

The answer of Prepare the journal entries to record the...

Question 5

Grant Company has decided to change the estimate of the useful life of an asset that has been in service for 2 years. Which of the following statements describes the proper way to revise a useful life estimate?

Accepted Answer

A)  Revisions in useful life are permitted if approved by the IRS. 
B)  Retroactive changes must be made to correct previously recorded depreciation. 
C)  Only future years will be affected by the revision. 
D)  Both current and future years will be affected by the revision. 
A)  Revisions in useful life are permitted if approved by the IRS. 
B)  Retroactive changes must be made to correct previously recorded depreciation. 
C)  Only future years will be affected by the revision. 
D)  Both current and future years will be affected by the revision.

Question 6

The cost of a patent should be amortized over its __________________ life or its _______________ life, whichever is shorter.

Accepted Answer

legal ,use

Question 7

The four subdivisions for plant assets are

Accepted Answer

A)  land, land improvements, buildings, and equipment. 
B)  intangibles, land, buildings, and equipment. 
C)  furnishings and fixtures, land, buildings, and equipment. 
D)  property, plant, equipment, and land. 
A)  land, land improvements, buildings, and equipment. 
B)  intangibles, land, buildings, and equipment. 
C)  furnishings and fixtures, land, buildings, and equipment. 
D)  property, plant, equipment, and land.

Question 8

A characteristic of a plant asset is that it is

Accepted Answer

A)  intangible. 
B)  used in the operations of a business. 
C)  held for sale in the ordinary course of the business. 
D)  not currently used in the business but held for future use. 
A)  intangible. 
B)  used in the operations of a business. 
C)  held for sale in the ordinary course of the business. 
D)  not currently used in the business but held for future use.

Question 9

Equipment was acquired on January 1, 2011, at a cost of $170,000. The equipment was originally estimated to have a salvage value of $10,000 and an estimated life of 10 years. Depreciation has been recorded through December 31, 2013, using the straight-line method. On January 1, 2014, the estimated salvage value was revised to $16,000 and the useful life was revised to a total of 8 years.
Instructions
Determine the depreciation expense for 2014.

Accepted Answer

The answer of Equipment was acquired on January 1, 2011,...

Question 10

In the notes to the financial statements, the depreciation and amortization methods used should be described.

Accepted Answer

A) True 
 B)False

Question 11

An asset was purchased for ¥200,000. It had an estimated residual value of ¥40,000 and an estimated useful life of 10 years. After 5 years of use, the estimated residual value is revised to ¥32,000 but the estimated useful life is unchanged. Assuming straight-line depreciation, depreciation expense in year 6 would be

Accepted Answer

A)  ¥24,000. 
B)  ¥17,600. 
C)  ¥12,000. 
D)  ¥16,800. 
A)  ¥24,000. 
B)  ¥17,600. 
C)  ¥12,000. 
D)  ¥16,800.

Question 12

When estimating the useful life of an asset, accountants do not consider

Accepted Answer

A)  the cost to replace the asset at the end of its useful life. 
B)  vulnerability to obsolescence. 
C)  expected repairs and maintenance. 
D)  the intended use of the asset. 
A)  the cost to replace the asset at the end of its useful life. 
B)  vulnerability to obsolescence. 
C)  expected repairs and maintenance. 
D)  the intended use of the asset.

Question 13

Match between columns
                        Premises: Tangible resources that are used in operations and are not intended for resale.
Cost less accumulated depreciation.
Useful life is expressed in terms of units of production or expected use
Equal amount of depreciation each period.
Material expenditures that increase an asset's operating efficiency, productive capacity, or useful life.
An accelerated depreciation method used for tax purposes.
Process of allocating the cost of equipment over its service life.
Expected cash value of the asset at the end of its useful life.
Small expenditures which primarily benefit the current period.
An accelerated depreciation method used for financial statement purposes.

Accepted Answer

The Answer of Revenue expenditures and Capital expenditures and Units-of-activity is...

Question 14

Which of the following is not considered an intangible asset?

Accepted Answer

A)  Goodwill. 
B)  An oil well. 
C)  A franchise. 
D)  A patent. 
A)  Goodwill. 
B)  An oil well. 
C)  A franchise. 
D)  A patent.

Question 15

Equipment with a cost of $300,000 has an estimated salvage value of $20,000 and an estimated life of 4 years or 10,000 hours. It is to be depreciated by the units-of-activity method. What is the amount of depreciation for the first full year, during which the equipment was used 2,700 hours?

Accepted Answer

A)  $75,000. 
B)  $70,000. 
C)  $75,600. 
D)  $72,500. 
A)  $75,000. 
B)  $70,000. 
C)  $75,600. 
D)  $72,500.

Question 16

Gunselman Company purchased a machine on January 1, 2014. In addition to the purchase price paid, the following additional costs were incurred:
(a) sales tax paid on the purchase price,
(b) transportation and insurance costs while the machinery was in transit from the seller,
(c) personnel training costs for initial operation of the machinery,
(d) installation costs necessary to secure the machinery to the building flooring,
(e) major overhaul to extend the life of the machinery,
(f) lubrication of the machinery gearing before the machinery was placed into service,
(g) lubrication of the machinery gearing after the machinery was placed into service, and
(h) annual city operating license.
Instructions
Indicate whether the items (a) through (h) are capital or revenue expenditures in the spaces provided: C = Capital, R = Revenue.

Accepted Answer

The answer of Gunselman Company purchased a machine on January...

Question 17

A company has the following assets: Buildings and Equipment, $\begin{array}{lr}
\text { less accumulated depreciation of } \$ 5,000,000 & \$ 35,000,000 \
\text { Copyrights } & 2,400,000 \
\text { Patents } & 10,000,000 \
\text { Land } & 12,000,000
\end{array}$ The total amount reported under Property, Plant, and Equipment would be

Accepted Answer

A)  $59,400,000. 
B)  $47,000,000. 
C)  $57,000,000. 
D)  $49,400,000. 
A)  $59,400,000. 
B)  $47,000,000. 
C)  $57,000,000. 
D)  $49,400,000.

Question 18

* 205. A company purchased factory equipment for $350,000. It is estimated that the equipment will have a $35,000 salvage value at the end of its estimated 5-year useful life. If the company uses the double-declining-balance method of depreciation, the amount of annual depreciation recorded for the second year after purchase would be

Accepted Answer

A)  $140,000. 
B)  $84,000. 
C)  $126,000. 
D)  $75,600. 
A)  $140,000. 
B)  $84,000. 
C)  $126,000. 
D)  $75,600.

Question 19

In general, how does one determine whether or not an expenditure should be included in the acquisition cost of property, plant, and equipment?

Accepted Answer

The acquisition cost of property plant a

Question 20

The declining-balance method of depreciation produces a(n)

Accepted Answer

A)  decreasing depreciation expense each period. 
B)  increasing depreciation expense each period. 
C)  declining percentage rate each period. 
D)  constant amount of depreciation expense each period. 
A)  decreasing depreciation expense each period. 
B)  increasing depreciation expense each period. 
C)  declining percentage rate each period. 
D)  constant amount of depreciation expense each period.

The following information is provided for Nguyen Company and Northwest Corporation. What is Northwest's asset turnover ratio for 2014?

Carpino Company purchased equipment and these costs were incurred: What amount should be recorded as the cost of the equipment?

In computing depreciation, salvage value is

Grant Company has decided to change the estimate of the useful life of an asset that has been in service for 2 years. Which of the following statements describes the proper way to revise a useful life estimate?

The cost of a patent should be amortized over its ____ life or its _ life, whichever is shorter.

The four subdivisions for plant assets are

A characteristic of a plant asset is that it is

In the notes to the financial statements, the depreciation and amortization methods used should be described.

When estimating the useful life of an asset, accountants do not consider

Which of the following is not considered an intangible asset?

Equipment with a cost of $300,000 has an estimated salvage value of $20,000 and an estimated life of 4 years or 10,000 hours. It is to be depreciated by the units-of-activity method. What is the amount of depreciation for the first full year, during which the equipment was used 2,700 hours?

A company has the following assets: Buildings and Equipment, less accumulated depreciation of \ 5,000,000 \ 35,000,000 Copyrights 2,400,000 Patents 10,000,000 Land 12,000,000 The total amount reported under Property, Plant, and Equipment would be

In general, how does one determine whether or not an expenditure should be included in the acquisition cost of property, plant, and equipment?

The declining-balance method of depreciation produces a(n)

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: The Big Picture

Understanding Investments and Acquisitions in Accounting

Filters

Exam 9: Reporting and Analyzing Long-Lived Assets

The following information is provided for Nguyen Company and Northwest Corporation. What is Northwest's asset turnover ratio for 2014?

Carpino Company purchased equipment and these costs were incurred: What amount should be recorded as the cost of the equipment?

In computing depreciation, salvage value is

Grant Company has decided to change the estimate of the useful life of an asset that has been in service for 2 years. Which of the following statements describes the proper way to revise a useful life estimate?

The cost of a patent should be amortized over its __________________ life or its _______________ life, whichever is shorter.

The four subdivisions for plant assets are

A characteristic of a plant asset is that it is

In the notes to the financial statements, the depreciation and amortization methods used should be described.

When estimating the useful life of an asset, accountants do not consider

Which of the following is not considered an intangible asset?

Equipment with a cost of $300,000 has an estimated salvage value of $20,000 and an estimated life of 4 years or 10,000 hours. It is to be depreciated by the units-of-activity method. What is the amount of depreciation for the first full year, during which the equipment was used 2,700 hours?

A company has the following assets: Buildings and Equipment, less accumulated depreciation of \ 5,000,000 \ 35,000,000 Copyrights 2,400,000 Patents 10,000,000 Land 12,000,000 The total amount reported under Property, Plant, and Equipment would be

In general, how does one determine whether or not an expenditure should be included in the acquisition cost of property, plant, and equipment?

The declining-balance method of depreciation produces a(n)

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: The Big Picture

Understanding Investments and Acquisitions in Accounting

Filters

The cost of a patent should be amortized over its ____ life or its _ life, whichever is shorter.