Exam 7: Reporting and Analyzing Liabilities and Stockholders Equity

Kathy's Blooms purchased a delivery van with a $60000 list price.The company was given a $6000 cash discount by the dealer and paid $3000 sales tax.Annual insurance on the van is $1500.As a result of the purchase by how much will Kathy's Blooms increase its van account?

A company purchased factory equipment on April 1 2022 for $128000.It is estimated that the equipment will have a $16000 salvage value at the end of its 10-year useful life.Using the straight-line method of depreciation the amount to be recorded as depreciation expense at December 31 2022 is

The following information is provided for Nguyen Company and Northwest Corporation. (in \ millions) Nquyen Company Northwest Corporation Net income 2022 \ 165 \ 420 Net sales 2022 1,650 4,900 Total assets 12/31/20 1,000 2,400 Total assets 12/31/21 1,050 3,000 Total assets 12/31/22 1,150 4,000 What is Nguyen's return on assets for 2022?

When purchasing delivery equipment sales taxes and motor vehicle licenses should be charged to Equipment.

Recording depreciation each period is necessary in accordance with the

A company purchases a remote building site for computer operations.The building will be suitable for operations after some expenditures.The wiring must be replaced to computer specifications.The roof is leaky and must be replaced.All rooms must be repainted and recarpeted and there will also be some plumbing work done.Which of the following statements is true?

A characteristic of a plant asset is that it is

A machine was purchased for $54000 and it was estimated to have a $9000 salvage value at the end of its useful life.Monthly depreciation expense of $600 was recorded using the straight-line method.The annual depreciation rate is

Interest may be included in the acquisition cost of a plant asset

Aber Company buys land for $145000 on 12/31/21.As of 3/31/22 the land has appreciated in value to $151000.On 12/31/22 the land has an appraised value of $155400.By what amount should the Land account be increased in 2022?

The following information is provided for Nguyen Company and Northwest Corporation. (in \ millions) Nquyen Company Northwest Corporation Net income 2022 \ 165 \ 420 Net sales 2022 1,650 4,900 Total assets 12/31/20 1,000 2,400 Total assets 12/31/21 1,050 3,000 Total assets 12/31/22 1,150 4,000 What is Nguyen's asset turnover for 2022?

During 2022 Phelps Corporation reported net sales of $2500000 net income of $1320000 and depreciation expense of $80000.Phelps also reported beginning total assets of $1000000 ending total assets of $1500000 plant assets of $800000 and accumulated depreciation of $500000.Phelps's asset turnover is

Land improvements should be depreciated over the useful life of the

During 2021 Hogan Company incurred $2100000 of research and development costs in to develop a new product and paid $200000 in legal fees for a patent on the product.On July 31 2022 Hogan paid $1290000 for legal fees in a successful defense of the patent.Use the following tabular analysis to record the cost of the legal defense assuming that the bill was paid in cash.

Depreciation is a process of

Ryan Inc.purchased a delivery truck with a $48000 list price.The company was given a $4800 cash discount by the dealer and paid $2400 sales tax.Annual insurance on the truck is $1200.As a result of the purchase by how much will Ryan Inc.increase its truck account?

In calculating depreciation both plant asset cost and useful life are based on estimates.

A company purchased land for $94000 cash.Real estate brokers' commission was $5000 and $7000 was spent for demolishing an old building on the land before construction of a new building could start.Proceeds from the salvage of the demolished building was $1200.Under the historical cost principle the cost of land would be recorded at

All the following are needed for the computation of depreciation except

A change in the estimated useful life of equipment requires