Question 1

Intangible assets do not include:

Accepted Answer

A)  Patents. 
B)  Copyrights. 
C)  Trademarks. 
D)  Goodwill. 
E)  Land held as an investment. 
A)  Patents. 
B)  Copyrights. 
C)  Trademarks. 
D)  Goodwill. 
E)  Land held as an investment.

Question 2

Wickland Company installs a manufacturing machine in its production facility at the beginning of the year at a cost of $87,000.The machine's useful life is estimated to be 5 years,or 400,000 units of product,with a $7,000 salvage value.During its second year,the machine produces 84,500 units of product.
-Determine the machines' second year depreciation under the straight-line method.

Accepted Answer

A)  $16,900. 
B)  $16,000. 
C)  $17,400. 
D)  $18,379. 
E)  $20,880. 
A)  $16,900. 
B)  $16,000. 
C)  $17,400. 
D)  $18,379. 
E)  $20,880.

Question 3

Total asset turnover is calculated by dividing net sales by average total assets.

Accepted Answer

A) True 
 B)False

Question 4

On April 1,Year 5 a company discarded a machine that had cost $10,000 and had accumulated depreciation of $8,000 as of December 31,Year 4.The asset had a 5-year life and no salvage value.Prepare the journal entries to record the updating of the depreciation expense and discarding of this asset in Year 5.

Accepted Answer

The answer of On April 1,Year 5 a company discarded...

Question 5

A company discarded a computer system originally purchased for $18,000.The accumulated depreciation was $17,200.The company should recognize a(an):

Accepted Answer

A)  $0 gain or loss. 
B)  $800 loss. 
C)  $800 gain. 
D)  $8,000 loss. 
E)  $7,200 loss. 
A)  $0 gain or loss. 
B)  $800 loss. 
C)  $800 gain. 
D)  $8,000 loss. 
E)  $7,200 loss.

Question 6

Wallace Company had a building that was destroyed by fire.The building originally cost $650,000,and its accumulated depreciation as of the date of the fire was $300,000.The company received $320,000 cash from an insurance policy that covered the building and will use that money to help rebuild.Prepare the single journal entry to record the disposal of the building and the receipt of cash from the insurance company.

Accepted Answer

\[\begin{array} { l c } 
\text

Question 7

The purchase of a property that included land,building,and related improvements is called a lump-sum or basket purchase.

Accepted Answer

A) True 
 B)False

Question 8

Match each of the following terms with the appropriate definitions.
-A method of depreciation that yields larger expense during the early years of an asset's life and smaller expense in the later years.

Accepted Answer

A) Revenue expenditure 
B) Units-of production method 
C) Accelerated depreciation 
D) Goodwill 
E) Ordinary repairs
F)Total asset turnover
G)Intangible assets
H)Betterment
I)Depletion 
A) Revenue expenditure 
B) Units-of production method 
C) Accelerated depreciation 
D) Goodwill 
E) Ordinary repairs
F)Total asset turnover
G)Intangible assets
H)Betterment
I)Depletion

Question 9

Suarez Company uses the straight-line method of depreciation.The company purchased a computer system on January 1,Year 1,for $1,600,000 with an expected life of six years and a salvage value of $130,000.Assuming the computer is sold on July 1,Year 3 for $1,000,000 cash,prepare the journal entries to record depreciation for the first 6 months of Year 3 and the sale of the computer.

Accepted Answer

None

Question 10

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.
 $$\begin{array} { | l | l | l | l | } 
\hline & \text { Straight-line } & \text { Units-of-production } & \text { Double-declining balance } \
\hline \text { Year 1 } & & & \
\hline \text { Year 2 } & & & \
\hline \text { Year 3 } & & & \
\hline \text { Year 4 } & & & \
\hline \text { Year 5 } & & & \
\hline \text { Totals } & & & \
\hline
\end{array}$$

Accepted Answer

None

Question 11

Decision makers and other users of financial statements are especially interested in evaluating a company's ability to use its assets in generating sales.

Accepted Answer

A) True 
 B)False

Question 12

It is necessary to report both the cost and the accumulated depreciation of plant assets in the financial statements.

Accepted Answer

A) True 
 B)False

Question 13

Companies that have a relatively large amount invested in assets to generate a given level of sales are considered capital-intensive.

Accepted Answer

A) True 
 B)False

Question 14

A patent is an exclusive right granted to its owner to manufacture and sell a patented device or to use a process for 20 years.

Accepted Answer

A) True 
 B)False

Question 15

Martin Company purchases a machine at the beginning of the year at a cost of $60,000.The machine is depreciated using the straight-line method.The machine's useful life is estimated to be 4 years with a $5,000 salvage value.
-Depreciation expense in year 4 is:

Accepted Answer

A)  $15,000. 
B)  $13,750. 
C)  $55,000. 
D)  $60,000. 
E)  $0. 
A)  $15,000. 
B)  $13,750. 
C)  $55,000. 
D)  $60,000. 
E)  $0.

Question 16

Riverboat Adventures pays $310,000 plus $15,000 in closing costs to buy out a competitor.The real estate consists of land appraised at $35,000,a building appraised at $105,000,and paddleboats appraised at $210,000.
-Compute the cost that should be allocated to the land.

Accepted Answer

A)  $93,000. 
B)  $140,000. 
C)  $32,500. 
D)  $31,000. 
E)  $97,500. 
A)  $93,000. 
B)  $140,000. 
C)  $32,500. 
D)  $31,000. 
E)  $97,500.

Question 17

Depletion is:

Accepted Answer

A)  The process of allocating the cost of natural resources to the period when it is consumed. 
B)  Calculated using the double-declining balance method. 
C)  Also called amortization. 
D)  An increase in the value of a natural resource when incurred. 
E)  The process of allocating the cost of intangibles to periods when they are used. 
A)  The process of allocating the cost of natural resources to the period when it is consumed. 
B)  Calculated using the double-declining balance method. 
C)  Also called amortization. 
D)  An increase in the value of a natural resource when incurred. 
E)  The process of allocating the cost of intangibles to periods when they are used.

Question 18

A ________ results from revising estimates of the useful life or salvage value of a plant asset.

Accepted Answer

change in

Question 19

Flask Company reports net sales of $4,315 million; cost of goods sold of $2,808 million; net income of $283 million; and average total assets of $2,136.Compute its total asset turnover.

Accepted Answer

A)  1.31. 
B)  2.02. 
C)  .13. 
D)  .76. 
E)  .50. 
A)  1.31. 
B)  2.02. 
C)  .13. 
D)  .76. 
E)  .50.

Question 20

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.

Intangible assets do not include:

Total asset turnover is calculated by dividing net sales by average total assets.

A company discarded a computer system originally purchased for $18,000.The accumulated depreciation was $17,200.The company should recognize a(an):

The purchase of a property that included land,building,and related improvements is called a lump-sum or basket purchase.

Match each of the following terms with the appropriate definitions. -A method of depreciation that yields larger expense during the early years of an asset's life and smaller expense in the later years.

Decision makers and other users of financial statements are especially interested in evaluating a company's ability to use its assets in generating sales.

It is necessary to report both the cost and the accumulated depreciation of plant assets in the financial statements.

Companies that have a relatively large amount invested in assets to generate a given level of sales are considered capital-intensive.

A patent is an exclusive right granted to its owner to manufacture and sell a patented device or to use a process for 20 years.

Martin Company purchases a machine at the beginning of the year at a cost of $60,000.The machine is depreciated using the straight-line method.The machine's useful life is estimated to be 4 years with a $5,000 salvage value. -Depreciation expense in year 4 is:

Riverboat Adventures pays $310,000 plus $15,000 in closing costs to buy out a competitor.The real estate consists of land appraised at $35,000,a building appraised at $105,000,and paddleboats appraised at $210,000. -Compute the cost that should be allocated to the land.

Depletion is:

A ________ results from revising estimates of the useful life or salvage value of a plant asset.

Flask Company reports net sales of $4,315 million; cost of goods sold of $2,808 million; net income of $283 million; and average total assets of $2,136.Compute its total asset turnover.

Accounting in Business

Analyzing 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

Time Value of Money

Investments

Partnership Accounting

Filters

Exam 8: Accounting for Long-Term Assets

Intangible assets do not include:

Total asset turnover is calculated by dividing net sales by average total assets.

A company discarded a computer system originally purchased for $18,000.The accumulated depreciation was $17,200.The company should recognize a(an):

The purchase of a property that included land,building,and related improvements is called a lump-sum or basket purchase.

Match each of the following terms with the appropriate definitions. -A method of depreciation that yields larger expense during the early years of an asset's life and smaller expense in the later years.

Decision makers and other users of financial statements are especially interested in evaluating a company's ability to use its assets in generating sales.

It is necessary to report both the cost and the accumulated depreciation of plant assets in the financial statements.

Companies that have a relatively large amount invested in assets to generate a given level of sales are considered capital-intensive.

A patent is an exclusive right granted to its owner to manufacture and sell a patented device or to use a process for 20 years.

Martin Company purchases a machine at the beginning of the year at a cost of $60,000.The machine is depreciated using the straight-line method.The machine's useful life is estimated to be 4 years with a $5,000 salvage value. -Depreciation expense in year 4 is:

Riverboat Adventures pays $310,000 plus $15,000 in closing costs to buy out a competitor.The real estate consists of land appraised at $35,000,a building appraised at $105,000,and paddleboats appraised at $210,000. -Compute the cost that should be allocated to the land.

Depletion is:

A ________ results from revising estimates of the useful life or salvage value of a plant asset.

Flask Company reports net sales of $4,315 million; cost of goods sold of $2,808 million; net income of $283 million; and average total assets of $2,136.Compute its total asset turnover.

Accounting in Business

Analyzing 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

Time Value of Money

Investments

Partnership Accounting

Filters