Exam 9: Plant Assets and Intangibles

On January 1,2014,Portwell Company purchased a patent for $200,000.They estimate a useful life of 4 years.At the end of 2014,the balance in the Patent account will be:

Job Sales sold a truck in exchange for $1,000 cash plus a forklift.The truck was originally purchased for $36,000,and had accumulated depreciation of $30,000 at the time it was sold.The forklift was valued at $4,000.Please provide the journal entry for this transaction.

Job Sales had to scrap a truck that could no longer be used.It was originally purchased for $36,000,and had accumulated depreciation of $30,000 at the time it was scrapped.Please provide the journal entry for the scrapping of the truck.

An asset impairment will be reflected by an increase in the book value of an asset,as shown on the balance sheet.

On January 1,2014,Portwell Company purchased a patent for $200,000.They estimate a useful life of 4 years.What entry is needed at the end of the first year?

Which of the following is TRUE when the estimate of an asset's useful life is increased?

An asset was purchased for $12,000.The asset's estimated useful life was 5 years,and its residual value was $2,000.Straight-line depreciation was used. -How much gain or loss is reported if the asset is sold for $4,500 at the end of the fourth year?

If an asset is fully depreciated,but it can continue to be used,the asset account and accumulated depreciation balance remain on the books,and no further depreciation is recorded.

If assets are junked before being fully depreciated,there is a loss equal to the book value of the asset.

Expenditures which extend the life of an asset or increase its productive capacity should be expensed.

The depreciation method in which salvage value is ignored until the end of the life of the asset is:

Charterhouse Services purchased a van on January 1,2012,for $56,000.It has an estimated life of 5 years,and an estimated salvage value of $6,000.Charterhouse uses straight-line depreciation.At the end of 2013,Charterhouse revised the estimated life of the asset from 5 years to 6 years.How much was the depreciation expense in the year 2014?

Acme purchased a property that included both land and a building for $200,000.Acme hired an appraiser who determined that the market value of the land was $140,000 and the market value of the building was $50,000. -At what amount should Acme record the land cost?

Depletion would be used for all of the following EXCEPT:

Albatross Services scrapped a van.The van originally cost $40,000,had an estimated salvage value of $1,000,and an estimated life of 10 years.At the time it was scrapped,it was fully depreciated.What was the effect of scrapping the van?

Which of the following is the expected cash value of an asset at the end of its useful life?

A company purchased a used machine for $80,000.The machine required installation costs of $8,000 and insurance while in transit of $500.At which of the following amounts would the equipment be recorded?

Which of the following types of expenses result from a decline in the utility of an intangible asset?

A trademark should be amortized over its estimated life.

Job Sales sold a truck for $9,000 cash.It was originally purchased for $36,000,and had accumulated depreciation of $30,000 at the time of sale.Please provide the journal entry for the sale of the truck.