Question 1

Natural resources are assets that include standing timber,mineral deposits,and oil and gas fields.

Accepted Answer

A) True 
 B)False

Question 2

__________________ is an estimate of an asset's value at the end of its benefit period (or useful life).

Accepted Answer

Salvage va

Question 3

A company purchased equipment on July 3 of the current year and placed it in service on August 1.The following costs were incurred in acquiring the equipment:
   Determine the amount to be recorded as cost for the equipment.

Accepted Answer

Purchase (invoice)price ……………… $215,600

Question 4

An asset's book value is $36,000 on January 1,Year 6.The asset is being depreciated $500 per month using the straight-line method.Assuming the asset is sold on July 1,Year 7 for $25,000,the company should record:

Accepted Answer

A) Neither a gain or loss is recognized on this type of transaction. 
B) A gain on sale of $2,000. 
C) A loss on sale of $1,000. 
D) A gain on sale of $1,000. 
E) A loss on sale of $2,000. 
A) Neither a gain or loss is recognized on this type of transaction. 
B) A gain on sale of $2,000. 
C) A loss on sale of $1,000. 
D) A gain on sale of $1,000. 
E) A loss on sale of $2,000.

Question 5

A company purchased land with a building for a total cost of $2,570,000 ($500,000 paid in cash and the balance on a long-term note).It was estimated that the land and building had market values of $900,000 and $2,100,000,respectively.
Determine the cost to be apportioned to the land and to the building and prepare the journal entry to record the acquisition.

Accepted Answer

@#IMG-DLM& Land………………………………………………………………

Question 6

_______________________ are expenditures that extend an asset's useful life beyond its original estimate.

Accepted Answer

Extraordin

Question 7

Explain the impact,if any,on depreciation when estimates that determine depreciation change.

Accepted Answer

Depreciation is revised when changes in

Question 8

Depreciation measures the actual decline in market value of an asset.

Accepted Answer

A) True 
 B)False

Question 9

Salvage value is:

Accepted Answer

A) Also called residual value. 
B) Also called scrap value. 
C) An estimate of the asset's value at the end of its benefit period. 
D) A factor relevant to determining depreciation. 
E) All of the choices are correct. 
A) Also called residual value. 
B) Also called scrap value. 
C) An estimate of the asset's value at the end of its benefit period. 
D) A factor relevant to determining depreciation. 
E) All of the choices are correct.

Question 10

On July 1 of the current year,Botox Mining Co.pays $5,400,000 for land estimated to contain 7,200,000 tons of recoverable ore.It installs machinery on July 3 costing $864,000 that has an 8 year life and no salvage value and is capable of mining the ore deposit in six years.The company removes and sells 745,000 tons of ore during its first six months of operations ending on December 31.Depreciation of the machinery is in proportion to the mine's depletion as the machinery will be abandoned after the ore is mined.Prepare entries to record (a)the purchase of the ore deposit,(b)the costs and installation of the machinery,(c)the depletion assuming the land has a zero salvage value,and (d)the depreciation on the machinery.

Accepted Answer

The answer of On July 1 of the current year,Botox...

Question 11

_____________________ are revenue expenditures to keep an asset in normal,good operating condition; they are necessary if an asset is to perform to expectations over its useful life.

Accepted Answer

The answer of _____________________ are revenue expenditures to keep an...

Question 12

A company purchased office equipment for $4,300 by trading in old equipment with a cost of $2,000 and that had accumulated depreciation of $1,900 as of the exchange date.The company received a $75 trade-in allowance for the old equipment with the balance of $4,225 paid in cash.Prepare the journal entry to record the exchange,assuming the transaction had commercial substance.

Accepted Answer

The answer of A company purchased office equipment for $4,300...

Question 13

Asset turnover is computed by dividing average total assets by cost of sales.

Accepted Answer

A) True 
 B)False

Question 14

A company used straight-line depreciation for an item of equipment that cost $12,000,had a salvage value of $2,000,and had a five-year useful life.After depreciating the asset for three complete years,the salvage value was reduced to $1,200 and its total useful life was increased from 5 years to 6 years.Determine the amount of depreciation to be charged against the machine during each of the remaining years of its useful life:

Accepted Answer

A) $1,000. 
B) $1,800. 
C) $1,467. 
D) $1,600. 
E) $2,160. 
A) $1,000. 
B) $1,800. 
C) $1,467. 
D) $1,600. 
E) $2,160.

Question 15

Inadequacy refers to:

Accepted Answer

A) The insufficient capacity of a company's plant assets to meet the company's growing production demands. 
B) An asset that is worn out. 
C) An asset that is no longer useful in producing goods and services. 
D) The condition where the salvage value is too small to replace the asset. 
E) The condition where the asset's salvage value is less than its cost. 
A) The insufficient capacity of a company's plant assets to meet the company's growing production demands. 
B) An asset that is worn out. 
C) An asset that is no longer useful in producing goods and services. 
D) The condition where the salvage value is too small to replace the asset. 
E) The condition where the asset's salvage value is less than its cost.

Question 16

On January 1,Year 1,Acadia purchased a computer system that cost $1,480,000.The estimated useful life of the computer is 3 years and salvage value is $40,000.Straight-line depreciation is to be used.On January 1,Year 2,the company determined that the estimated useful life of the computer would be 4 years instead of 3 years.The estimated salvage value will only be $10,000.
Prepare the journal entry to record depreciation expense for Year 1.
Prepare the journal entry to record depreciation expense for Year 2.

Accepted Answer

@#IMG-DLM& Calculations:
Year 1 - Year 2 depreciat

Question 17

The founders of BizChair.com understand that managing plant assets is important to their company's success.What are some of the plant asset issues that the founders identify as important to them?

Accepted Answer

The owners found that the vehicles and e

Question 18

A company had average total assets of $897,000.Its gross sales were $1,090,000 and its net sales were $1,000,000.The company's total asset turnover equals:

Accepted Answer

A) 0.82. 
B) 0.90. 
C) 1.09. 
D) 1.11. 
E) 1.26. 
A) 0.82. 
B) 0.90. 
C) 1.09. 
D) 1.11. 
E) 1.26.

Question 19

Rockport Company reports the following in millions:
 net sales of $25,355 for 2014 and $22,340 for 2014; end-of-year total assets of $15,875 for 2014 and $13,860 for 2013.Compute its total asset turnover for 2011 and assess its level if competitors average a total asset turnover of 2.0 times.

Accepted Answer

$25,355/[(15,875 + 13,860)/2]

Question 20

Ordinary repairs are expenditures that keep assets in normal,good operating condition.

Accepted Answer

A) True 
 B)False

Exam 10: Plant Assets, natural Resources, and Intangibles

Natural resources are assets that include standing timber,mineral deposits,and oil and gas fields.

__________________ is an estimate of an asset's value at the end of its benefit period (or useful life).

A company purchased equipment on July 3 of the current year and placed it in service on August 1.The following costs were incurred in acquiring the equipment: Determine the amount to be recorded as cost for the equipment.

An asset's book value is $36,000 on January 1,Year 6.The asset is being depreciated $500 per month using the straight-line method.Assuming the asset is sold on July 1,Year 7 for $25,000,the company should record:

_______________________ are expenditures that extend an asset's useful life beyond its original estimate.

Explain the impact,if any,on depreciation when estimates that determine depreciation change.

Depreciation measures the actual decline in market value of an asset.

Salvage value is:

_____________________ are revenue expenditures to keep an asset in normal,good operating condition; they are necessary if an asset is to perform to expectations over its useful life.

Asset turnover is computed by dividing average total assets by cost of sales.

Inadequacy refers to:

The founders of BizChair.com understand that managing plant assets is important to their company's success.What are some of the plant asset issues that the founders identify as important to them?

A company had average total assets of $897,000.Its gross sales were $1,090,000 and its net sales were $1,000,000.The company's total asset turnover equals:

Rockport Company reports the following in millions: net sales of $25,355 for 2014 and $22,340 for 2014; end-of-year total assets of $15,875 for 2014 and $13,860 for 2013.Compute its total asset turnover for 2011 and assess its level if competitors average a total asset turnover of 2.0 times.

Ordinary repairs are expenditures that keep assets in normal,good operating condition.

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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