Question 1

Land improvements are:

Accepted Answer

A) Assets that increase the usefulness of land,and like land,are not depreciated. 
B) Assets that increase the usefulness of land,but that have a limited useful life and are subject to depreciation. 
C) Included in the cost of the land account. 
D) Expensed in the period incurred. 
E) Also called basket purchases. 
A) Assets that increase the usefulness of land,and like land,are not depreciated. 
B) Assets that increase the usefulness of land,but that have a limited useful life and are subject to depreciation. 
C) Included in the cost of the land account. 
D) Expensed in the period incurred. 
E) Also called basket purchases.

Question 2

Betterments are a type of capital expenditure.

Accepted Answer

A) True 
 B)False

Question 3

Compare the different depreciation methods (straight-line,units-of-production,and double-declining-balance)with respect to the amounts of depreciation expense per period and the total depreciation over the life of the asset.

Accepted Answer

The amount of depreciation expense per p

Question 4

The insufficient capacity of a company's plant asset to meet the company's productive demands is called ________.

Accepted Answer

The answer of The insufficient capacity of a company's plant...

Question 5

The depreciation method in which a plant asset's depreciation expense for a period is determined by applying a constant depreciation rate to the asset's beginning-of-period book value is called:

Accepted Answer

A) Book value depreciation. 
B) Declining-balance depreciation. 
C) Straight-line depreciation. 
D) Units-of-production depreciation. 
E) Modified accelerated cost recovery system (MACRS)depreciation. 
A) Book value depreciation. 
B) Declining-balance depreciation. 
C) Straight-line depreciation. 
D) Units-of-production depreciation. 
E) Modified accelerated cost recovery system (MACRS)depreciation.

Question 6

Marlow Company purchased a point of sale system on January 1 for $3,400.This system has a useful life of 10 years and a salvage value of $400.
-What would be the accumulated depreciation at the end of the second year of its useful life using the double-declining-balance method?

Accepted Answer

A) $2,176. 
B) $544. 
C) $1,200. 
D) $600. 
E) $1,224. 
A) $2,176. 
B) $544. 
C) $1,200. 
D) $600. 
E) $1,224.

Question 7

A company paid $150,000,plus a 7% commission and $5,000 in closing costs for a property.The property included land appraised at $87,500,land improvements appraised at $35,000,and a building appraised at $52,500.What should be the allocation of this property's costs in the company's accounting records?

Accepted Answer

A) Land $75,000; Land Improvements,$30,000; Building,$45,000. 
B) Land $75,000; Land Improvements,$30,800; Building,$46,200. 
C) Land $82,750; Land Improvements,$33,100; Building,$49,650. 
D) Land $80,250; Land Improvements,$32,100; Building,$48,150. 
E) Land $77,500; Land Improvements; $31,000; Building; $46,500. 
A) Land $75,000; Land Improvements,$30,000; Building,$45,000. 
B) Land $75,000; Land Improvements,$30,800; Building,$46,200. 
C) Land $82,750; Land Improvements,$33,100; Building,$49,650. 
D) Land $80,250; Land Improvements,$32,100; Building,$48,150. 
E) Land $77,500; Land Improvements; $31,000; Building; $46,500.

Question 8

Merchant Company purchased property for a building site.The costs associated with the property were:  
What portion of these costs should be allocated to the cost of the land and what portion should be allocated to the cost of the new building?

Accepted Answer

A) $187,700 to Land; $19,000 to Building. 
B) $200,700 to Land; $6,000 to Building. 
C) $200,000 to Land; $6,700 to Building. 
D) $185,000 to Land; $21,700 to Building. 
E) $206,700 to Land; $0 to Building. 
A) $187,700 to Land; $19,000 to Building. 
B) $200,700 to Land; $6,000 to Building. 
C) $200,000 to Land; $6,700 to Building. 
D) $185,000 to Land; $21,700 to Building. 
E) $206,700 to Land; $0 to Building.

Question 9

A company purchased store 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 store equipment for $4,300...

Question 10

Plant assets refer to nonphysical assets that are used in the operations of a business.

Accepted Answer

A) True 
 B)False

Question 11

On September 30 of the current year,a company acquired and placed in service a machine at a cost of $700,000.It has been estimated that the machine has a service life of five years and a salvage value of $40,000.Using the double-declining-balance method of depreciation,complete the schedule below showing depreciation amounts for all six years (round answers to the nearest dollar).The company closes its books on December 31 of each year.

Accepted Answer

@#IMG-DLM& *for 3 months.
**fo

Question 12

________ are capital expenditures that make a plant asset more productive but do not always increase an asset's life; they often involve adding a component to an asset or replacing one of its old components with a better one.

Accepted Answer

The answer of ________ are capital expenditures that make a...

Question 13

A company purchased a machine on January 1 of the current year for $750,000.Calculate the annual depreciation expense for each year of the machine's life (estimated at 5 years or 20,000 hours,with a salvage value of $75,000)using each of the below-mentioned methods.During the machine's 5-year life its hourly usage was: 3,000; 4,000; 5,000; 5,000; and 3,000 hours.

Accepted Answer

@#IMG-DLM& Straight-line: ($750,000 - $75,0000)/ 5

Question 14

A company bought new heating system for $42,000 and was given a trade-in of $2,000 on an old heating system,so the company paid $40,000 cash with the trade-in.The old system had an original cost of $37,000 and accumulated depreciation of $34,000.If the transaction has commercial substance,the company should record the new heating system at:

Accepted Answer

A) $2,000. 
B) $3,000. 
C) $40,000. 
D) $42,000. 
E) $43,000. 
A) $2,000. 
B) $3,000. 
C) $40,000. 
D) $42,000. 
E) $43,000.

Question 15

A plant asset's useful life is the length of time it is productively used in a company's operations.

Accepted Answer

A) True 
 B)False

Question 16

A company purchased a special purpose machine on September 15 of the past year,and it was installed and ready to run on January 1 of this year.The following costs were incurred in the purchase and installation of the machine.Determine the total cost of the machine.

Accepted Answer

The answer of A company purchased a special purpose machine...

Question 17

Crestfield leases office space.On January 3,the company incurs $12,000 to improve the leased office space.These improvements are expected to yield benefits for 10 years.Crestfield has 4 years remaining on its lease.What journal entry would be needed to record the expense for the first year related to the improvements?

Accepted Answer

A) Debit Amortization Expense $1,200; credit Accumulated Amortization-Leasehold Improvements $1,200. 
B) Debit Depletion Expense $3,000; credit Accumulated Depletion $3,000. 
C) Debit Depreciation Expense $1,200; credit Accumulated Depreciation $1,200. 
D) Debit Depletion Expense $12,000; credit Accumulated Depletion $12,000. 
E) Debit Amortization Expense $3,000; credit Accumulated Amortization-Leasehold Improvements $3,000. 
A) Debit Amortization Expense $1,200; credit Accumulated Amortization-Leasehold Improvements $1,200. 
B) Debit Depletion Expense $3,000; credit Accumulated Depletion $3,000. 
C) Debit Depreciation Expense $1,200; credit Accumulated Depreciation $1,200. 
D) Debit Depletion Expense $12,000; credit Accumulated Depletion $12,000. 
E) Debit Amortization Expense $3,000; credit Accumulated Amortization-Leasehold Improvements $3,000.

Question 18

During the current year,Beldon Co.acquired a new computer with a cash price of $12,800 by exchanging an old one on which the company received a $1,500 trade-in allowance (with the balance of $11,300 paid in cash).The old computer cost $9,000 and its accumulated depreciation was $5,500 as of the exchange date.Assuming the exchange transaction had commercial substance,prepare the journal entry to record the exchange.

Accepted Answer

The answer of During the current year,Beldon Co.acquired a new...

Question 19

A company's old machine that cost $40,000 and had accumulated depreciation of $22,000 was traded in on a new machine having an estimated 20-year life with an invoice price of $45,000.The company also paid $33,000 cash,along with its old machine to acquire the new machine.If this transaction has commercial substance,the new machine should be recorded at:

Accepted Answer

A) $40,000. 
B) $33,000. 
C) $45,000. 
D) $18,000. 
E) $51,000. 
A) $40,000. 
B) $33,000. 
C) $45,000. 
D) $18,000. 
E) $51,000.

Question 20

A company purchased a tract of land for its natural resources at a cost of $1,500,000.It expects to mine 2,000,000 tons of ore from this land.The salvage value of the land is expected to be $250,000.If 150,000 tons of ore are mined during the first year,the journal entry to record the depletion is:

Accepted Answer

A) Debit Depletion Expense $93,750; credit Natural Resources $93,750. 
B) Debit Cash $112,500; credit Natural Resources $112,500. 
C) Debit Depletion Expense $93,750; credit Accumulated Depletion $93,750. 
D) Debit Cash $93,750; credit Accumulated Depletion $93,750. 
E) Debit Depletion Expense $112,500; credit Accumulated Depletion $112,500. 
A) Debit Depletion Expense $93,750; credit Natural Resources $93,750. 
B) Debit Cash $112,500; credit Natural Resources $112,500. 
C) Debit Depletion Expense $93,750; credit Accumulated Depletion $93,750. 
D) Debit Cash $93,750; credit Accumulated Depletion $93,750. 
E) Debit Depletion Expense $112,500; credit Accumulated Depletion $112,500.

Land improvements are:

Betterments are a type of capital expenditure.

Compare the different depreciation methods (straight-line,units-of-production,and double-declining-balance)with respect to the amounts of depreciation expense per period and the total depreciation over the life of the asset.

The insufficient capacity of a company's plant asset to meet the company's productive demands is called ________.

The depreciation method in which a plant asset's depreciation expense for a period is determined by applying a constant depreciation rate to the asset's beginning-of-period book value is called:

Marlow Company purchased a point of sale system on January 1 for $3,400.This system has a useful life of 10 years and a salvage value of $400. -What would be the accumulated depreciation at the end of the second year of its useful life using the double-declining-balance method?

Merchant Company purchased property for a building site.The costs associated with the property were: What portion of these costs should be allocated to the cost of the land and what portion should be allocated to the cost of the new building?

Plant assets refer to nonphysical assets that are used in the operations of a business.

________ are capital expenditures that make a plant asset more productive but do not always increase an asset's life; they often involve adding a component to an asset or replacing one of its old components with a better one.

A plant asset's useful life is the length of time it is productively used in a company's operations.

A company purchased a special purpose machine on September 15 of the past year,and it was installed and ready to run on January 1 of this year.The following costs were incurred in the purchase and installation of the machine.Determine the total cost of the machine.

A company purchased a tract of land for its natural resources at a cost of $1,500,000.It expects to mine 2,000,000 tons of ore from this land.The salvage value of the land is expected to be $250,000.If 150,000 tons of ore are mined during the first year,the journal entry to record the depletion is:

Accounting in Business

Accounting for Business Transactions

Adjusting Accounts for Financial Statements

Accounting for Merchandising Operations

Inventories and Cost of Sales

Cash,fraud,and Internal Controls

Accounting for Receivables

Accounting for Current Liabilities

Accounting for Long-Term Liabilities

Corporate Reporting and Analysis

Reporting Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Process Costing and Analysis

Activity-Based Costing and Analysis

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing and Analysis

Master Budgets and Performance Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Time Value of Money

Investments

Lean Principles and Accounting

Filters

Exam 8: Accounting for Long-Term Assets

Land improvements are:

Betterments are a type of capital expenditure.

Compare the different depreciation methods (straight-line,units-of-production,and double-declining-balance)with respect to the amounts of depreciation expense per period and the total depreciation over the life of the asset.

The insufficient capacity of a company's plant asset to meet the company's productive demands is called ________.

The depreciation method in which a plant asset's depreciation expense for a period is determined by applying a constant depreciation rate to the asset's beginning-of-period book value is called:

Marlow Company purchased a point of sale system on January 1 for $3,400.This system has a useful life of 10 years and a salvage value of $400. -What would be the accumulated depreciation at the end of the second year of its useful life using the double-declining-balance method?

Merchant Company purchased property for a building site.The costs associated with the property were: What portion of these costs should be allocated to the cost of the land and what portion should be allocated to the cost of the new building?

Plant assets refer to nonphysical assets that are used in the operations of a business.

________ are capital expenditures that make a plant asset more productive but do not always increase an asset's life; they often involve adding a component to an asset or replacing one of its old components with a better one.

A plant asset's useful life is the length of time it is productively used in a company's operations.

A company purchased a special purpose machine on September 15 of the past year,and it was installed and ready to run on January 1 of this year.The following costs were incurred in the purchase and installation of the machine.Determine the total cost of the machine.

A company purchased a tract of land for its natural resources at a cost of $1,500,000.It expects to mine 2,000,000 tons of ore from this land.The salvage value of the land is expected to be $250,000.If 150,000 tons of ore are mined during the first year,the journal entry to record the depletion is:

Accounting in Business

Accounting for Business Transactions

Adjusting Accounts for Financial Statements

Accounting for Merchandising Operations

Inventories and Cost of Sales

Cash,fraud,and Internal Controls

Accounting for Receivables

Accounting for Current Liabilities

Accounting for Long-Term Liabilities

Corporate Reporting and Analysis

Reporting Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Process Costing and Analysis

Activity-Based Costing and Analysis

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing and Analysis

Master Budgets and Performance Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Time Value of Money

Investments

Lean Principles and Accounting

Filters