Exam 8: Long-Term and Other Assets

A repair that extends the useful life of an asset would be considered a(n):

Timber, coal, and other minerals are long-term assets called natural resources.

Computing depletion expense is much like computing depreciation under the straight-line method.

Nike would be an example of a:

Properties whose physical substance consists of natural resources that are consumed in the operation of a business are called:

Sienna Co. purchased 1,000 shares of Microsoft stock. Management is not actively managing this stock , and only plans to sell it if there is a need to generate cash. This stock would be classified as:

The footnotes to the financial statements will include a description of the intangible asset and its estimated useful life.

When a company buys a building, realtor commissions are NOT included in the cost of the building.

Rose Corp. purchased land for $77,000. Additionally, Rose paid title insurance of $700, a commission of $7,000, and back taxes due in the amount of $1,000. To ready the land for construction, Rose paid $3,000 to remove an unwanted building, $6,000 to level and grade the property, and $12,000 for paving. The cost of the company's land is _______, and the land improvements are _______.

Intangibles, such as patents and copyrights, are generally listed after property, plant, and equipment, as well as after natural resources, on a company's long-term assets portion of the Balance Sheet.

Ironworks Industries purchased a piece of equipment for $80,000 with an estimated salvage value of $15,000 on January 1. Its estimated life is 5 years. To the nearest dollar, what is the equipment's depreciation using double-declining-balance for year 2? (Round any intermediary calculations to the nearest cent and your final answer to the nearest dollar.)

The return on assets and the fixed asset turnover are usually computed monthly.

Depreciation is based upon cost, useful life and salvage value.

Which of the following would be considered part of the cost of machinery and equipment?

A truck costing $70,000 has accumulated depreciation of $51,000. The truck is scrapped for $0. The journal entry to record this transaction is to:

Depreciation is a process of valuation of an asset.

Copyrights to protect various forms of media are conveyed by the federal government for a period of:

In computing depletion expense, salvage value is not part of the computation.

Bob's Bakery made a basket purchase involving four assets. Their market values were A: $50,000; B: $46,000 C: $48,000; and D: $56,000. The price Bob's paid for the four assets was $150,000. To the nearest dollar, what final price will be recorded for asset D? (Round any intermediary calculations to the nearest cent and your final answer to the nearest dollar.)

An asset has a cost of $70,000 with a residual value of $14,000. It has a life of 5 years and was purchased on January 1. Its fourth full year of depreciation expense under double-declining-balance will be: (Round any intermediary calculations to the nearest cent and your final answer to the nearest dollar.)