Exam 10: Long Term Assets

The cost of a natural resource is expensed in the year during which the resource is

Which of the following would be considered a revenue expenditure?

According to generally accepted accounting principles,the proper accounting treatment of the cost of developing intangible assets is to

Which of the following is not classified properly as property,plant,and equipment?

On January 1,a machine with a useful life of five years and a residual value of $6,000 is purchased for $30,000.What is the depreciation expense in year 3 under straight-line depreciation?

Land and a building on the land are purchased for $1,296,000.The appraised values of the land and building are $340,000 and $1,020,000,respectively.The cost allocated to the land should be

Shelby Manufacturing Company purchased three machines during the year: Each machine is expected to last six years and have no residual value.The company's fiscal year corresponds to the calendar year.Using the straight-line method,compute the depreciation charge for each machine for the year.Round amounts to the nearest dollar.

Residual value is not relevant when calculating double-declining-balance depreciation.

In general,a cost incurred in conjunction with a long-term asset is included in the long-term asset account when the cost

Drilling equipment with a five-year useful life is used solely in conjunction with an oil well that has an eight-year life.The equipment should be depreciated over eight years.

Speedy Printing purchased a new printing press for $80,000.It depreciates the press over a five-year period,using the double-declining-balance method of depreciation.If the press has an $8,000 estimated residual value,calculate depreciation expense for each of the five years.(Show your work.)

Which of the following is subject to depletion?

An expenditure for which of the following items would be considered a revenue expenditure?

The cost of a sewage system should be included in the Land Improvements account.

Match each definition with the correct term below. -Estimated useful life A)Enlargements of a plant's physical layout. B)A right to occupy land or buildings under a long-term contract. C)The portion of an asset's acquisition cost that a company expects to recover when it disposes of the asset. D)The proportional allocation of the cost of a natural resource to the units extracted. E)A registered symbol that can be used only by its owner to identify a product or service. F)The excess of the amount paid for a business over the fair market value of the business's net assets. G)The periodic allocation of the cost of an intangible long-lived asset to the periods it benefits. H)Improvements to a plant asset that do not add to the plant's physical layout. I)The total number of service units expected from a long-term asset. J)The periodic allocation of the cost of a tangible long-lived asset over its estimated useful life.

Which of the following is not considered an intangible asset?

The routine overhaul of the engine of a company vehicle is an example of an ordinary repair.

If net cash flows from operating activities total $208,000,purchases of plant assets total $60,000,dividends total $24,000,and sales of plant assets total $34,000,the free cash flow equals

Match each definition with the correct term below. -Depreciation A)Enlargements of a plant's physical layout. B)A right to occupy land or buildings under a long-term contract. C)The portion of an asset's acquisition cost that a company expects to recover when it disposes of the asset. D)The proportional allocation of the cost of a natural resource to the units extracted. E)A registered symbol that can be used only by its owner to identify a product or service. F)The excess of the amount paid for a business over the fair market value of the business's net assets. G)The periodic allocation of the cost of an intangible long-lived asset to the periods it benefits. H)Improvements to a plant asset that do not add to the plant's physical layout. I)The total number of service units expected from a long-term asset. J)The periodic allocation of the cost of a tangible long-lived asset over its estimated useful life.

Accelerated methods of depreciation result in higher net income in the last years of an asset's life compared to the straight-line method.