Question 1

Plant assets are:

Accepted Answer

A) Tangible assets used in the operation of a business that have a useful life of more than one accounting period. 
B) Current assets. 
C) Held for sale. 
D) Intangible assets used in the operations of a business that have a useful life of more than one accounting period. 
E) Tangible assets used in the operation of business that have a useful life of less than one accounting period. 
A) Tangible assets used in the operation of a business that have a useful life of more than one accounting period. 
B) Current assets. 
C) Held for sale. 
D) Intangible assets used in the operations of a business that have a useful life of more than one accounting period. 
E) Tangible assets used in the operation of business that have a useful life of less than one accounting period.

Question 2

Match between columns
                        Premises: Assets that increase the benefits of land, have a limited useful life, and are subject to depreciation.
The total cost of a plant asset less its accumulated depreciation.
The insufficient capacity of plant assets to meet the company's productive demands.
Major repairs that extend the useful life of a plant asset beyond its original estimate.
An estimate of an asset's value at the end its benefit period.
An exclusive right granted to its owner to manufacture and sell an item, or to use a process, for 20 years.
The process of allocating the cost of an intangible asset to expense over its estimated useful life.
A condition which, because of new inventions and improvements, a plant asset is no longer useful in producing goods or services with a competitive advantage.
The process of allocating the cost of natural resources to the periods when they are consumed.
A right granted that gives its owner the exclusive privilege to publish and sell musical, literary, or artistic work during the life of the creator plus 70 years.

Accepted Answer

The Answer of Obsolescence and Patent and Copyright and Inadequacy is...

Question 3

A company purchased property for $100,000.The property included a building,a parking lot,and land.The building was appraised at $62,000; the land at $45,000,and the parking lot at $18,000.Land should be recorded in the accounting records with an allocated cost of:

Accepted Answer

A) $ 0. 
B) $ 36,000. 
C) $ 42,000. 
D) $ 45,000. 
E) $100,000. 
A) $ 0. 
B) $ 36,000. 
C) $ 42,000. 
D) $ 45,000. 
E) $100,000.

Question 4

Plant assets include:

Accepted Answer

A) Land. 
B) Land improvements. 
C) Buildings. 
D) Machinery and equipment. 
E) All of the items are plant assets. 
A) Land. 
B) Land improvements. 
C) Buildings. 
D) Machinery and equipment. 
E) All of the items are plant assets.

Question 5

Wilson Engineering purchased a depreciable asset costing $45,000 on January 1,Year 1.The asset is estimated to have a salvage value of $5,000 and an estimated useful life of 8 years.Straight-line depreciation is used.If the asset is sold on July 1,Year 5 for $20,000,the journal entry to record the sale will include:

Accepted Answer

A) A credit to cash for $20,000. 
B) A debit to accumulated depreciation for $22,500. 
C) A debit to loss on sale for $10,000. 
D) A credit to loss on sale for $10,000. 
E) A debit to gain on sale for $2,500. 
A) A credit to cash for $20,000. 
B) A debit to accumulated depreciation for $22,500. 
C) A debit to loss on sale for $10,000. 
D) A credit to loss on sale for $10,000. 
E) A debit to gain on sale for $2,500.

Question 6

Capital expenditures are also called balance sheet expenditures.

Accepted Answer

A) True 
 B)False

Question 7

On January 1,a machine costing $260,000 with a 4-year life and an estimated $5,000 salvage value was purchased.It was also estimated that the machine would produce 500,000 units during its life.The actual units produced during its first year of operation were 110,000.Determine the amount of depreciation expense for the first year under each of the following assumptions:
1.The company uses the straight-line method of depreciation.
2.The company uses the units-of-production method of depreciation.
3.The company uses the double-declining-balance method of depreciation.

Accepted Answer

1.($260,000 - $5,000)/4 = $63,

Question 8

A company purchased land on which to construct a new building for a cost of $250,000.Additional costs incurred were:
Real estate broker's commissions…………………………. $15,000
Legal fees incurred in purchase of the real estate………… 2,500
Landscaping……………………………………………….. 10,000
Expenses to remove old house located on land…………… 3,000
Proceeds from selling materials salvaged from old house 1,000
What total dollar amount should be charged to Land and what amount should be charged to the new Building?

Accepted Answer

All costs should be

Question 9

Obsolescence:

Accepted Answer

A) Occurs when an asset is at the end of its useful life. 
B) Refers to a plant asset that is no longer useful in producing goods and services with a competitive advantage. 
C) Refers to the insufficient capacity of a company's plant assets to meet the company's productive demands. 
D) Occurs when an asset's salvage value is less than its replacement cost. 
E) Does not affect plant assets. 
A) Occurs when an asset is at the end of its useful life. 
B) Refers to a plant asset that is no longer useful in producing goods and services with a competitive advantage. 
C) Refers to the insufficient capacity of a company's plant assets to meet the company's productive demands. 
D) Occurs when an asset's salvage value is less than its replacement cost. 
E) Does not affect plant assets.

Question 10

A machine originally had an estimated useful life of 5 years,but after 3 complete years,it was decided that the original estimate of useful life should have been 10 years.At that point the remaining cost to be depreciated should be allocated over the remaining:

Accepted Answer

A) 2 years. 
B) 5 years. 
C) 7 years. 
D) 8 years. 
E) 10 years. 
A) 2 years. 
B) 5 years. 
C) 7 years. 
D) 8 years. 
E) 10 years.

Question 11

Depreciation:

Accepted Answer

A) Measures the decline in market value of an asset. 
B) Measures physical deterioration of an asset. 
C) Is the process of allocating to expense the cost of a plant asset. 
D) Is an outflow of cash from the use of a plant asset. 
E) Is applied to land. 
A) Measures the decline in market value of an asset. 
B) Measures physical deterioration of an asset. 
C) Is the process of allocating to expense the cost of a plant asset. 
D) Is an outflow of cash from the use of a plant asset. 
E) Is applied to land.

Question 12

Revising estimates of the useful life or salvage value of a plant asset is referred to as a ____________________________.

Accepted Answer

change in

Question 13

A company purchased and installed a machine on January 1 at a total cost of $72,000.Straight-line depreciation was calculated based on the assumption of a five-year life and no salvage value.The machine was disposed of on July 1 of the fourth year.The company uses the calendar year.
1.Prepare the general journal entry to update depreciation to July 1 in the fourth year.
2.Prepare the general journal entry to record the disposal of the machine under each of these three independent situations:
a.The machine was sold for $22,000 cash.
b.The machine was sold for $15,000 cash.
c.The machine was totally destroyed in a fire and the insurance company settled the claim for $18,000 cash.

Accepted Answer

The answer of A company purchased and installed a machine...

Question 14

Abers reported average total assets of $10,965 million and net sales of $11,430 million.Its total asset turnover equals .96.

Accepted Answer

A) True 
 B)False

Question 15

Match each of the following terms with the appropriate definitions.

-Major repairs that extend the useful life of a plant asset beyond its original estimate.

Accepted Answer

A) Obsolescence 
B) Amortization 
C) Depletion 
D) Salvage value 
E) Book value
F)Land improvements
G)Copyright
H)Inadequacy
I)Patent 
A) Obsolescence 
B) Amortization 
C) Depletion 
D) Salvage value 
E) Book value
F)Land improvements
G)Copyright
H)Inadequacy
I)Patent

Question 16

The relevant factor(s)in computing depreciation include:

Accepted Answer

A) Cost. 
B) Salvage value. 
C) Useful life. 
D) Depreciation method. 
E) All of the choices are needed to compute depreciation. 
A) Cost. 
B) Salvage value. 
C) Useful life. 
D) Depreciation method. 
E) All of the choices are needed to compute depreciation.

Question 17

A company had net sales of $541,500 in 2013 and $475,300 in 2014.Its average assets were $410,000 for 2013 and $400,000 for 2014.(1)Calculate the total asset turnover for each year.(2)Interpret and comment on the company's efficiency in the use of its assets.

Accepted Answer

2013: $541,500/$410,000 = 1.32
2014: $47

Question 18

Describe the accounting for intangible assets,including their acquisition,cost allocation,and accounts involved.

Accepted Answer

Intangible assets are recorded at acquis

Question 19

It is not necessary to report both the cost and the accumulated depreciation of plant assets in the financial statements.

Accepted Answer

A) True 
 B)False

Question 20

Match each of the following terms with the appropriate definitions.

-The process of allocating the cost of an intangible asset to expense over its estimated useful life.

Accepted Answer

A) Obsolescence 
B) Amortization 
C) Depletion 
D) Salvage value 
E) Book value
F)Land improvements
G)Copyright
H)Inadequacy
I)Patent 
A) Obsolescence 
B) Amortization 
C) Depletion 
D) Salvage value 
E) Book value
F)Land improvements
G)Copyright
H)Inadequacy
I)Patent

Exam 10: Plant Assets, natural Resources, and Intangibles

Plant assets are:

A company purchased property for $100,000.The property included a building,a parking lot,and land.The building was appraised at $62,000; the land at $45,000,and the parking lot at $18,000.Land should be recorded in the accounting records with an allocated cost of:

Plant assets include:

Capital expenditures are also called balance sheet expenditures.

Obsolescence:

A machine originally had an estimated useful life of 5 years,but after 3 complete years,it was decided that the original estimate of useful life should have been 10 years.At that point the remaining cost to be depreciated should be allocated over the remaining:

Depreciation:

Revising estimates of the useful life or salvage value of a plant asset is referred to as a ____________________________.

Abers reported average total assets of $10,965 million and net sales of $11,430 million.Its total asset turnover equals .96.

Match each of the following terms with the appropriate definitions. -Major repairs that extend the useful life of a plant asset beyond its original estimate.

The relevant factor(s)in computing depreciation include:

A company had net sales of $541,500 in 2013 and $475,300 in 2014.Its average assets were $410,000 for 2013 and $400,000 for 2014.(1)Calculate the total asset turnover for each year.(2)Interpret and comment on the company's efficiency in the use of its assets.

Describe the accounting for intangible assets,including their acquisition,cost allocation,and accounts involved.

It is not necessary to report both the cost and the accumulated depreciation of plant assets in the financial statements.

Match each of the following terms with the appropriate definitions. -The process of allocating the cost of an intangible asset to expense over its estimated useful life.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Time Value of Money B

Activity-Based Costing C

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