Exam 9: Plant Assets and Intangibles

Navajo Mining Company purchased a mine in 2013 for $3,400,000.It was estimated that the mine contained 200,000 tons of ore and that the mine would be worthless after all of the ore was extracted.The company extracted 25,000 tons of ore in 2013 and 30,000 tons of ore in 2014. What is the book value of the mine at the end of 2014?

On January 1,2013,Zane Manufacturing Company purchased a machine for $40,000.The company expects to use the machine a total of 24,000 hours over the next 6 years.The estimated sales price of the machine at the end of 6 years is $4,000.The company used the machine 8,000 hours in 2013 and 12,000 in 2014. - What is depreciation expense for 2014 if the company uses units-of-production depreciation?

Which of the following items should NOT be depreciated,depleted,or amortized?

On January 1,2012,a company buys a truck for $42,000 cash.It has estimated residual value of $2,000,and an estimated life of 8 years,or 200,000 miles.If the company uses straight-line depreciation,please show the journal entry for the first year depreciation.

Which of the following is included in the cost of a plant asset?

On January 1,2012,a company buys a truck for $42,000 cash.It has estimated residual value of $2,000,and an estimated life of 8 years,or 200,000 miles. -At the end of 2012,the truck had driven 30,000 miles.If the company uses units-of-production depreciation,please show the journal entry for the first year depreciation.

Which of the following is the expense resulting from a decline in the utility of a natural resource?

Which of the following asset categories would include the cost of clearing land and removing unwanted buildings?

Pallmall Company has a truck which was purchased in prior years for $60,000.At the end of 2013,there is $30,000 of accumulated depreciation.The value of the truck has been impaired,and its remaining value is now estimated at $18,000.Please provide the journal entry needed to record the asset impairment.

If goodwill increases,the company records a gain.

On January 1,2013,Zane Manufacturing Company purchased a machine for $40,000.The company expects to use the machine a total of 24,000 hours over the next 6 years.The estimated sales price of the machine at the end of 6 years is $4,000.The company used the machine 8,000 hours in 2013 and 12,000 in 2014. -What is depreciation expense for 2014 if the company uses double-declining-balance depreciation?

A company's accountant capitalizes a payment that should be recorded as an expense.Which of the following is TRUE?

Which of the following depreciation methods allocates an equal amount of depreciation to each year?

On January 1,2012,a company buys a truck for $42,000 cash.It has estimated residual value of $2,000,and an estimated life of 4 years,or 200,000 miles.Assume the company uses straight-line depreciation.Please complete the depreciation schedule below. $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$$\text { Depreciation for the Year }$ Date Asset Cost Depreciable Cost Depreciation Rate Depreciation Expense Accumulated Depreciation Book Value 1-1-2012 12-31-2012 12-31-2013 12-31-2014 12-31-2015

Which of the following items is included in the journal entry if a company sells equipment at a price less than its book value?

An asset costs $80,000 and has a salvage value of $7,000.It has a four-year life.Using double-declining-balance depreciation,Year 2 depreciation would be:

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 building cost?

An asset has a life of 3 years.It cost $90,000 and has an expected salvage value of $15,000.Using double-declining-balance depreciation,what is the depreciation for Year 1?

On January 1,2013,Zane Manufacturing Company purchased a machine for $40,000.The company expects to use the machine a total of 24,000 hours over the next 6 years.The estimated sales price of the machine at the end of 6 years is $4,000.The company used the machine 8,000 hours in 2013 and 12,000 in 2014. - What is the book value of the machine at the end of 2014 if the company uses units-of-production depreciation?

On January 1,2012,Portwell Company purchased a patent for $200,000.They estimate a useful life of 4 years.At the end of 2012,the Patent account will have a debit balance of $200,000,and there will be a credit balance in the Accumulated amortization account of $50,000.