Question 1

Research and development costs are

Accepted Answer

A)  treated as an expense when incurred. 
B)  capitalized but not amortized. 
C)  capitalized and amortized over the periods that will probably benefit from the research and development. 
D)  included with the cost of the patent resulting from the research and development. 
A)  treated as an expense when incurred. 
B)  capitalized but not amortized. 
C)  capitalized and amortized over the periods that will probably benefit from the research and development. 
D)  included with the cost of the patent resulting from the research and development.

Question 2

Fill in the table shown below indicating the period of time over which each intangible asset should be amortized, and indicate the amount of amortization expense that should be reported for 2013.

Accepted Answer

Goodwill = $ -0-
Tra

Question 3

Capitalizing an expenditure rather than recording it as a revenue expenditure

Accepted Answer

A)  affects the total book value of plant assets reported on the balance sheet and the amount of net income reported during a period. 
B)  affects the total book value of plant assets on the balance sheet, but has no effect on the amount of net income reported during an accounting period. 
C)  affects the amount of net income reported during an accounting period, but has no effect on the total book value of plant assets on the balance sheet. 
D)  has no effect on the book value of plant assets on the balance sheet or the amount of income reported on the income statement. 
A)  affects the total book value of plant assets reported on the balance sheet and the amount of net income reported during a period. 
B)  affects the total book value of plant assets on the balance sheet, but has no effect on the amount of net income reported during an accounting period. 
C)  affects the amount of net income reported during an accounting period, but has no effect on the total book value of plant assets on the balance sheet. 
D)  has no effect on the book value of plant assets on the balance sheet or the amount of income reported on the income statement.

Question 4

Identify where each of the following accounts would be reported on Coca­Cola's financial statements
-Land improvements

Accepted Answer

A) Balance Sheet - Property, Plant, and Equipment 
B) Balance Sheet - Intangible Assets 
C) Balance Sheet - Current Assets 
D) Balance Sheet - Other Assets 
E) Income Statement - Operating Section
F)Income Statement - Other Revenue and Expense Section
G)Statement of Cash Flows 
A) Balance Sheet - Property, Plant, and Equipment 
B) Balance Sheet - Intangible Assets 
C) Balance Sheet - Current Assets 
D) Balance Sheet - Other Assets 
E) Income Statement - Operating Section
F)Income Statement - Other Revenue and Expense Section
G)Statement of Cash Flows

Question 5

Depreciation is a process by which

Accepted Answer

A)  replacement funds are accumulated for plant and equipment. 
B)  the decline in market value of plant and equipment is determined and recorded. 
C)  the cost of plant and equipment is allocated to expense over the time periods which benefit from the use of the asset. 
D)  the difference between current market value and historical cost of plant and equipment. 
A)  replacement funds are accumulated for plant and equipment. 
B)  the decline in market value of plant and equipment is determined and recorded. 
C)  the cost of plant and equipment is allocated to expense over the time periods which benefit from the use of the asset. 
D)  the difference between current market value and historical cost of plant and equipment.

Question 6

Yellow Dog Transit sold an old truck on December 31, 2013, for $18,400 cash. The following data was available when the truck sold:   When this transaction is recorded, it should include an

Accepted Answer

A)  Loss on Disposal account for $3,000 
B)  Decrease of $21,400 to the Truck account 
C)  Gain on Disposal account for $3,000 
D)  Gain on Disposal account for $5,000 
A)  Loss on Disposal account for $3,000 
B)  Decrease of $21,400 to the Truck account 
C)  Gain on Disposal account for $3,000 
D)  Gain on Disposal account for $5,000

Question 7

How are the cash flow effects from the purchase and sale of intangible assets reported on a statement of cash flows?
a. As operating activities
b. As investing activities
c. As financing activities
d. They are not reported on a statement of cash flows

Accepted Answer

The answer of How are the cash flow effects from...

Question 8

Select the financial statement on which the user would most likely find the answer to the question given. Select all that apply.
-Did the company purchase any intangible assets during the year?

Accepted Answer

A) 	Income statement 
B) 	Balance sheet 
C) 	Statement of cash flows 
D) 	Statement of retained earnings 
A) 	Income statement 
B) 	Balance sheet 
C) 	Statement of cash flows 
D) 	Statement of retained earnings

Question 9

What impact does materiality have on the determination of how a cost related to a plant asset is reported on the financial statements?

Accepted Answer

When an expenditure is incurred, a deter

Question 10

Newco Publishing Company purchased equipment at the beginning of 2014 for $200,000. The company decided to depreciate the equipment over an 8-year period using the straight-line method. The company estimated the equipment's residual value at $20,000. The journal entry to record depreciation expense for 2014 will

Accepted Answer

A)  increase Depreciation Expense and increase Accumulated Depreciation for $25,000. 
B)  increase Accumulated Depreciation and decrease Equipment for $25,000. 
C)  increase Depreciation Expense and decrease Equipment for $22,500. 
D)  increase Depreciation Expense and increase Accumulated Depreciation for $22,500. 
A)  increase Depreciation Expense and increase Accumulated Depreciation for $25,000. 
B)  increase Accumulated Depreciation and decrease Equipment for $25,000. 
C)  increase Depreciation Expense and decrease Equipment for $22,500. 
D)  increase Depreciation Expense and increase Accumulated Depreciation for $22,500.

Question 11

Waxman Company purchased a patent for $170,000 at the beginning of 2013, and estimated that its expected useful life was 10 years. The patent has a legal life of 17 years. What amount should be recorded as amortization expense for the patent in 2013?

Accepted Answer

A)  $-0- 
B)  $7,000 
C)  $10,000 
D)  $17,000 
A)  $-0- 
B)  $7,000 
C)  $10,000 
D)  $17,000

Question 12

Racer Company acquired patent rights on January 1, 2013 for $1,080,000. The patent has a useful life equal to its legal life of 15 years. On January 2, 2016, Racer successfully defended the patent in a lawsuit at a cost of $78,000.
REQUIRED:
1 Determine the patent amortization expense for the current year ended December 31, 2016.
2 Identify the accounting equation effects of the adjustment to recognize the amortization.
1 $1,080,000/15 + $78,000/12 = $78,500 total patent expense

Accepted Answer

Amortized

Question 13

Barton Resort incurred the following costs to acquire and prepare land during 2015 for a new parking lot: purchase price for land, $800,000; cost to clear the land, $30,000; cost of paving, $40,000; and lighting for the parking lot, $20,000. How much should Barton record in the Land Improvements account?

Accepted Answer

A)  $30,000 
B)  $40,000 
C)  $60,000 
D)  $90,000 
A)  $30,000 
B)  $40,000 
C)  $60,000 
D)  $90,000

Question 14

Use the information presented below for Farley River, Inc. for 2015 and 2014 to answer the questions that follow. Farley River uses the straight-line depreciation method.
  
-Refer to the information for Farley River, Inc. Between 2014 and 2015, Farley River sold some equipment that had an original cost of $57,500. Which statement is most likely true concerning transactions that must have occurred during the period?

Accepted Answer

A)  Farley River also purchased additional equipment during the year. 
B)  The selling price of the equipment sold was reported with net sales. 
C)  The equipment that was sold had a book value of $12,500. 
D)  The equipment sold had not been reported with Farley River's property, plant and equipment. 
A)  Farley River also purchased additional equipment during the year. 
B)  The selling price of the equipment sold was reported with net sales. 
C)  The equipment that was sold had a book value of $12,500. 
D)  The equipment sold had not been reported with Farley River's property, plant and equipment.

Question 15

Norwood, Inc.
Norwood, Inc. purchased a crane at a cost of $80,000. The crane has an estimated residual value of $5,000 and an estimated life of 8 years, or 12,500 hours of operation. The crane was purchased on January 1, 2015 and was used 2,700 hours in 2015 and 2,600 hours in 2016.
-Refer to the information about Norwood, Inc. If Norwood uses the straight-line method, what is the book value at December 31, 2017?

Accepted Answer

A)  $46,875 
B)  $51,875 
C)  $62,500 
D)  $67,500 
A)  $46,875 
B)  $51,875 
C)  $62,500 
D)  $67,500

Question 16

Bing's Export Co.
Bing's Export Co. purchased a new delivery truck at the beginning of 2015. The truck has a cost of $37,000, an estimated life of 5 years, and an estimated residual value of $7,000. A full year's depreciation expense is to be recorded in 2015. The truck was driven 20,000 miles during 2015 and 24,000 miles during 2016. The number of expected miles over five years is 100,000.
-Refer to information for Bing's Export Co. What is the amount by which double-declining-balance depreciation exceeds straight-line depreciation over the 5- year life of the truck?

Accepted Answer

A)  $-0- 
B)  $7,000 
C)  $37,000 
D)  $6,000 
A)  $-0- 
B)  $7,000 
C)  $37,000 
D)  $6,000

Question 17

Blanton Company bought equipment on January 1, 2010 with a cost of $160,000, an estimated residual value of $40,000, and an estimated life of 15 years was depreciated by the straight-line method for 4 years. Due to obsolescence, it was determined at the beginning of 2014 that the useful life should be shortened by 3 years and the residual value changed to zero. What is the accumulated depreciation at the end of 2013?

Accepted Answer

A)  $42,667 
B)  $32,000 
C)  $40,000 
D)  $8,000 
A)  $42,667 
B)  $32,000 
C)  $40,000 
D)  $8,000

Question 18

Identify where each of the following accounts would be reported on Coca­Cola's financial statements
-Copyright

Accepted Answer

A) Balance Sheet - Property, Plant, and Equipment 
B) Balance Sheet - Intangible Assets 
C) Balance Sheet - Current Assets 
D) Balance Sheet - Other Assets 
E) Income Statement - Operating Section
F)Income Statement - Other Revenue and Expense Section
G)Statement of Cash Flows 
A) Balance Sheet - Property, Plant, and Equipment 
B) Balance Sheet - Intangible Assets 
C) Balance Sheet - Current Assets 
D) Balance Sheet - Other Assets 
E) Income Statement - Operating Section
F)Income Statement - Other Revenue and Expense Section
G)Statement of Cash Flows

Question 19

Plant assets, current assets, property, plant and equipment, and fixed assets are all tangible assets.

Accepted Answer

A) True 
 B)False

Question 20

Select the account that would be increased to show each of the following costs.
-The costs paid to clear land.

Accepted Answer

A) Land 
B) Land Improvements 
C) Buildings 
D) Machinery and Equipment 
E) An Expense Account 
A) Land 
B) Land Improvements 
C) Buildings 
D) Machinery and Equipment 
E) An Expense Account

Research and development costs are

Fill in the table shown below indicating the period of time over which each intangible asset should be amortized, and indicate the amount of amortization expense that should be reported for 2013.

Capitalizing an expenditure rather than recording it as a revenue expenditure

Identify where each of the following accounts would be reported on CocaCola's financial statements -Land improvements

Depreciation is a process by which

Yellow Dog Transit sold an old truck on December 31, 2013, for $18,400 cash. The following data was available when the truck sold: When this transaction is recorded, it should include an

How are the cash flow effects from the purchase and sale of intangible assets reported on a statement of cash flows? a. As operating activities b. As investing activities c. As financing activities d. They are not reported on a statement of cash flows

Select the financial statement on which the user would most likely find the answer to the question given. Select all that apply. -Did the company purchase any intangible assets during the year?

What impact does materiality have on the determination of how a cost related to a plant asset is reported on the financial statements?

Waxman Company purchased a patent for $170,000 at the beginning of 2013, and estimated that its expected useful life was 10 years. The patent has a legal life of 17 years. What amount should be recorded as amortization expense for the patent in 2013?

Identify where each of the following accounts would be reported on CocaCola's financial statements -Copyright

Plant assets, current assets, property, plant and equipment, and fixed assets are all tangible assets.

Select the account that would be increased to show each of the following costs. -The costs paid to clear land.

Accounting As a Form of Communication

Financial Statements and the Annual Report

Processing Accounting Information

Income Measurement and Accrual Accounting

Inventories and Cost of Goods Sold

Cash and Internal Control

Receivables and Investments

Current Liabilities, Contingencies, and the Time Value of Money

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

International-Financial-Reporting-Standards

Filters

Exam 8: Operating Assets: Property, Plant, and Equipment, and Intangibles

Research and development costs are

Fill in the table shown below indicating the period of time over which each intangible asset should be amortized, and indicate the amount of amortization expense that should be reported for 2013.

Capitalizing an expenditure rather than recording it as a revenue expenditure

Identify where each of the following accounts would be reported on Coca­Cola's financial statements -Land improvements

Depreciation is a process by which

Yellow Dog Transit sold an old truck on December 31, 2013, for $18,400 cash. The following data was available when the truck sold: When this transaction is recorded, it should include an

How are the cash flow effects from the purchase and sale of intangible assets reported on a statement of cash flows? a. As operating activities b. As investing activities c. As financing activities d. They are not reported on a statement of cash flows

Select the financial statement on which the user would most likely find the answer to the question given. Select all that apply. -Did the company purchase any intangible assets during the year?

What impact does materiality have on the determination of how a cost related to a plant asset is reported on the financial statements?

Waxman Company purchased a patent for $170,000 at the beginning of 2013, and estimated that its expected useful life was 10 years. The patent has a legal life of 17 years. What amount should be recorded as amortization expense for the patent in 2013?

Identify where each of the following accounts would be reported on Coca­Cola's financial statements -Copyright

Plant assets, current assets, property, plant and equipment, and fixed assets are all tangible assets.

Select the account that would be increased to show each of the following costs. -The costs paid to clear land.

Accounting As a Form of Communication

Financial Statements and the Annual Report

Processing Accounting Information

Income Measurement and Accrual Accounting

Inventories and Cost of Goods Sold

Cash and Internal Control

Receivables and Investments

Current Liabilities, Contingencies, and the Time Value of Money

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

International-Financial-Reporting-Standards

Filters

Identify where each of the following accounts would be reported on CocaCola's financial statements -Land improvements

Identify where each of the following accounts would be reported on CocaCola's financial statements -Copyright