Question 1

All of the following statements regarding increases in the value of plant assets under U.S.GAAP and IFRS are true except:

Accepted Answer

A) U.S.GAAP prohibits companies to record increases in the value of plant assets. 
B) IFRS permits upward asset revaluations. 
C) Under IFRS, a company can reverse an impairment and record that increase in income. 
D) Under U.S.GAAP, a company can reverse an impairment and can include it in comprehensive income. 
E) Under IFRS, an impairment increase beyond as asset's original cost can be recorded in comprehensive income. 
A) U.S.GAAP prohibits companies to record increases in the value of plant assets. 
B) IFRS permits upward asset revaluations. 
C) Under IFRS, a company can reverse an impairment and record that increase in income. 
D) Under U.S.GAAP, a company can reverse an impairment and can include it in comprehensive income. 
E) Under IFRS, an impairment increase beyond as asset's original cost can be recorded in comprehensive income.

Question 2

Salta Company installs a manufacturing machine in its factory at the beginning of the year at a cost of $87,000.The machine's useful life is estimated to be 5 years,or 400,000 units of product,with a $7,000 salvage value.During its second year,the machine produces 84,500 units of product.Determine the machines' second year depreciation under the double-declining-balance method.

Accepted Answer

A) $16,900. 
B) $16,000. 
C) $17,400. 
D) $18,379. 
E) $20,880. 
A) $16,900. 
B) $16,000. 
C) $17,400. 
D) $18,379. 
E) $20,880.

Question 3

A depreciable asset costing $75,000 is purchased on September 1,Year 1.The asset is estimated to have a salvage value of $10,000 and an estimated useful life of 4 years.Double-declining-balance depreciation is used.If the asset is sold on December 31,Year 3 for $13,000,the journal entry to record the sale will include:

Accepted Answer

A) A credit to gain on sale for $8,000. 
B) A debit to loss on sale for $2,625. 
C) A credit to accumulated depreciation for $59,375. 
D) A debit to loss on sale for $3,042. 
E) A credit to gain on sale for $4,979. 
A) A credit to gain on sale for $8,000. 
B) A debit to loss on sale for $2,625. 
C) A credit to accumulated depreciation for $59,375. 
D) A debit to loss on sale for $3,042. 
E) A credit to gain on sale for $4,979.

Question 4

Cambria Company reports net sales of $4,315 million; cost of goods sold of $2,808 million; net income of $283 million; and average total assets of $2,136.Compute its total asset turnover.

Accepted Answer

A) 1.31. 
B) 2.02. 
C) .13. 
D) .76. 
E) .50. 
A) 1.31. 
B) 2.02. 
C) .13. 
D) .76. 
E) .50.

Question 5

A copyright gives its owner the exclusive right to publish and sell a musical,literary,or artistic work during the life of the creator plus 17 years.

Accepted Answer

A) True 
 B)False

Question 6

On January 2,2010,a company purchased a delivery truck for $45,000 cash.The truck had an estimated useful life of seven years and an estimated salvage value of $3,000.The straight-line method of depreciation was used.Prepare the journal entries to record depreciation expense and the disposition of the truck on September 1,2014,under each of the following assumptions:
a.The truck and $45,000 cash were given in exchange for a new delivery truck that had a cash price of $60,000.This transaction has commercial substance.
b.The truck and $40,000 cash were exchanged for a new delivery truck that had a cash price of $60,000.This transaction lacks commercial substance.

Accepted Answer

The answer of On January 2,2010,a company purchased a delivery...

Question 7

A company purchased a special purpose machine on August 1 of the past year,and it was installed and ready to run on January 1 of this year.The following costs were incurred in the purchase and installation of the machine.
   Determine the total cost of the machine.

Accepted Answer

The answer of A company purchased a special purpose machine...

Question 8

Extraordinary repairs:

Accepted Answer

A) Are revenue expenditures. 
B) Extend an asset's useful life beyond its original estimate. 
C) Are credited to accumulated depreciation. 
D) Are additional costs of plants assets that do not materially increase the asset's life. 
E) Are expensed as incurred. 
A) Are revenue expenditures. 
B) Extend an asset's useful life beyond its original estimate. 
C) Are credited to accumulated depreciation. 
D) Are additional costs of plants assets that do not materially increase the asset's life. 
E) Are expensed as incurred.

Question 9

A loss on disposal of a plant asset occurs if the cash proceeds received from the asset sale is less than the asset's book value.

Accepted Answer

A) True 
 B)False

Question 10

A company purchased a machine valued at $66,000.It traded in an old machine for a $9,000 trade-in allowance and the company paid $57,000 cash with the trade-in.The old machine cost $44,000 and had accumulated depreciation of $36,000.This transaction has commercial substance.What is the recorded value of the new machine?

Accepted Answer

A) $ 8,000. 
B) $ 9,000. 
C) $57,000. 
D) $65,000. 
E) $66,000. 
A) $ 8,000. 
B) $ 9,000. 
C) $57,000. 
D) $65,000. 
E) $66,000.

Question 11

Record the following events and transactions for Axle Company for the current year.
1.On January 2,Axle purchased a patent for $35,000 with a useful life of 10 years.Prepare the journal entry to amortize the patent at the end of the first year.
2.On January 3,Axle purchased a leasehold for $8,400,000.The leasehold expires in 15 years.Prepare the journal entry to amortize the leasehold at the end of the first year.
3.On January 4,Axle purchased a music distributor's collection of lyrics and songs for $1,425,000.The copyrights are expected to last another 30 years.Prepare the journal entry to amortize the copyright at the end of the first year.

Accepted Answer

1.
Amortization Expense-Patent 3,500
Acc

Question 12

Total asset turnover is calculated by dividing:

Accepted Answer

A) Gross profit by average total assets. 
B) Average total assets by gross profit. 
C) Net sales by average total assets. 
D) Average total assets by net sales. 
E) Net assets by total assets. 
A) Gross profit by average total assets. 
B) Average total assets by gross profit. 
C) Net sales by average total assets. 
D) Average total assets by net sales. 
E) Net assets by total assets.

Question 13

The modified accelerated cost recovery system (MACRS):

Accepted Answer

A) Is included in the U.S.federal income tax rules for depreciating assets. 
B) Is an out-dated system that is no longer used by companies. 
C) Is required for financial reporting. 
D) Is identical to units of production depreciation. 
E) All of the choices are correct. 
A) Is included in the U.S.federal income tax rules for depreciating assets. 
B) Is an out-dated system that is no longer used by companies. 
C) Is required for financial reporting. 
D) Is identical to units of production depreciation. 
E) All of the choices are correct.

Question 14

The following information is available on a depreciable asset owned by First Bank & Trust:
Purchase date October 1,Year 1
Purchase price $85,000
Salvage value $10,000
Useful life 10 years
Depreciation method straight-line
The asset's book value is $70,000 on October 1,Year 3.On that date,management determines that the asset's salvage value should be $5,000 rather than the original estimate of $10,000.Based on this information,the amount of depreciation expense the company should recognize during the last three months of Year 3 would be:

Accepted Answer

A) $2,187.50 
B) $1,718.75 
C) $2,031.25 
D) $2,321.43 
E) $1,964.29 
A) $2,187.50 
B) $1,718.75 
C) $2,031.25 
D) $2,321.43 
E) $1,964.29

Question 15

Gain or loss on the disposal of assets is determined by comparing the disposed asset's book value to the value of any assets received.

Accepted Answer

A) True 
 B)False

Question 16

Prepare journal entries to record the following transactions of a company during the current year:

Accepted Answer

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

Question 17

Big River Rafting pays $310,000 plus $15,000 in closing costs to buy out a competitor.The real estate consists of land appraised at $105,000,a building appraised at $210,000,and equipment appraised at $35,000.Compute the cost that should be allocated to the building.

Accepted Answer

A) $93,000. 
B) $186,000. 
C) $32,500. 
D) $195,000. 
E) $97,500. 
A) $93,000. 
B) $186,000. 
C) $32,500. 
D) $195,000. 
E) $97,500.

Question 18

On April 1,2013,a company discarded a computer that cost $15,000 and that had a useful life of 4 years,and a salvage value of $1,000.Based on straight-line depreciation,the accumulated depreciation as of December 31,2012 was $10,700.
a.Prepare the journal entry to record depreciation up to the date of disposal of the computer.
b.Prepare the journal entry to record the disposal of the computer.

Accepted Answer

a. Apr 1 Depreciation Expense……………………………

Question 19

If a machine is damaged during unpacking,the repairs are added to its cost.

Accepted Answer

A) True 
 B)False

Question 20

A company's property records revealed the following information about its plant assets:
   Calculate the depreciation expense for each machine for the year ended December 31 for Year
1,and for the year ended December 31 for Year 2.
Machine 1:
Year 1______________________ Year 2 _______________________
Machine 2:
Year 1 ______________________ Year 2 _______________________

Accepted Answer

Machine 1:
Year 1: [($42,000 -

All of the following statements regarding increases in the value of plant assets under U.S.GAAP and IFRS are true except:

Cambria Company reports net sales of $4,315 million; cost of goods sold of $2,808 million; net income of $283 million; and average total assets of $2,136.Compute its total asset turnover.

A copyright gives its owner the exclusive right to publish and sell a musical,literary,or artistic work during the life of the creator plus 17 years.

A company purchased a special purpose machine on August 1 of the past year,and it was installed and ready to run on January 1 of this year.The following costs were incurred in the purchase and installation of the machine. Determine the total cost of the machine.

Extraordinary repairs:

A loss on disposal of a plant asset occurs if the cash proceeds received from the asset sale is less than the asset's book value.

Total asset turnover is calculated by dividing:

The modified accelerated cost recovery system (MACRS):

Gain or loss on the disposal of assets is determined by comparing the disposed asset's book value to the value of any assets received.

Prepare journal entries to record the following transactions of a company during the current year:

Big River Rafting pays $310,000 plus $15,000 in closing costs to buy out a competitor.The real estate consists of land appraised at $105,000,a building appraised at $210,000,and equipment appraised at $35,000.Compute the cost that should be allocated to the building.

If a machine is damaged during unpacking,the repairs are added to its cost.

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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Exam 10: Plant Assets, natural Resources, and Intangibles

All of the following statements regarding increases in the value of plant assets under U.S.GAAP and IFRS are true except:

Cambria Company reports net sales of $4,315 million; cost of goods sold of $2,808 million; net income of $283 million; and average total assets of $2,136.Compute its total asset turnover.

A copyright gives its owner the exclusive right to publish and sell a musical,literary,or artistic work during the life of the creator plus 17 years.

A company purchased a special purpose machine on August 1 of the past year,and it was installed and ready to run on January 1 of this year.The following costs were incurred in the purchase and installation of the machine. Determine the total cost of the machine.

Extraordinary repairs:

A loss on disposal of a plant asset occurs if the cash proceeds received from the asset sale is less than the asset's book value.

Total asset turnover is calculated by dividing:

The modified accelerated cost recovery system (MACRS):

Gain or loss on the disposal of assets is determined by comparing the disposed asset's book value to the value of any assets received.

Prepare journal entries to record the following transactions of a company during the current year:

Big River Rafting pays $310,000 plus $15,000 in closing costs to buy out a competitor.The real estate consists of land appraised at $105,000,a building appraised at $210,000,and equipment appraised at $35,000.Compute the cost that should be allocated to the building.

If a machine is damaged during unpacking,the repairs are added to its cost.

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

Filters