Exam 10: Plant Assets, Natural Resources, and Intangibles

Land and land improvements are one and the same and therefore must be recorded in single account.

Trimer Corp junks a truck which was originally purchased for $50,000 and had accumulated depreciation of $30,000. Give journal entry for disposal of truck.

Hastings Company has purchased a group of assets for $15,000. The assets and their relative market values are listed below. Which of the following amounts would be debited to the Land account?

The gain or loss on the sale of a plant asset is determined by comparing:

An intangible asset is an asset with no physical form that is valuable because of the special rights it carries.

A lump-sum purchase or basket purchase involves paying a single price for several assets as a group.

Cost of an asset is $1,000,000 and its residual value is $100,000. Estimated useful life of the asset is four years. Calculate depreciation for the first year using the double-declining-balance method of depreciation.

Trimer Corp sold a truck for $15,000 cash. It was originally purchased for $50,000 and had accumulated depreciation of $30,000 at the time of sale. Give the journal entry for the sale of truck.

Roggers Company's beginning and ending total assets in the year 2015 were $18,000,000 and $22,000,000, respectively. Its assets turnover ratio for the year was calculated to be 1.75 times. Calculate the amount of net sales for the year 2015.

Which of the following should be included in the cost of land?

Depreciation is the allocation of a plant asset's cost to expense over the useful life of the asset.

On January 1, 2015, Zade Manufacturing Company purchased a machine for $40,000,000. The company expects to use the machine for 24,000 hours over the next 6 years. The estimated sale value of the machine at the end of the sixth year is $40,000. The company used the machine for 3,600 hours in 2015 and 5,000 hours in 2016. What is the book value of the machine at the end of year 2016 if the company uses double-declining-balance method of depreciation? (Do not round your intermediate calculations.)

Residual value is also known as depreciable cost.

Steel Rolling Company purchased a mine in 2015 for $500,000 and they estimated that 30,000 tons of iron ore can be extracted from it. It has no residual value. The company has extracted 2,500 tons of ore in 2015. How will the mine be reported on the balance sheet at the end of year 2015?

A plant asset is said to be fully depreciated when the book value is:

Equipment was purchased for $24,000. The equipment's estimated useful life was 5 years, and its residual value was $4,000. The straight-line method of depreciation was used. Calculate gain or loss on sale if the equipment is sold for $18,000 at the end of the first year. Give journal entry to record the sale of equipment at book value.

Fred owns a delivery truck. Which of the following costs, associated with the truck, will be capitalized and depreciated?

Which of the following depreciation methods writes off a higher amount of depreciation in earlier years than in later years?

Repair work that generates a capital expenditure because it extends the plant asset's useful life past the normal expected life is known as an extraordinary repair.

The cost of a building depends on whether the company is constructing the building by itself or is acquiring an existing one.