Exam 16: Accounting for Property, Plant, Equipment, and Intangible Assets

For each of the following, identify in column 1 the category to which the account belongs, in column 2 the normal balance for the account, in column 3 the financial statement that the account in which the account balance is reported, and in column 4 the account's nature (permanent/temporary). -

Corbin Corporation has a plant asset with a cost of $30,000 that is traded for a similar asset priced at $60,000. Assuming accumulated depreciation of $25,000 and a trade-in allowance of $7,500, what is the cost basis for the new asset?

When equipment that is fully depreciated is discarded:

For each of the following, identify in column 1 the category to which the account belongs, in column 2 the normal balance for the account, in column 3 the financial statement that the account in which the account balance is reported, and in column 4 the account's nature (permanent/temporary). -

The entry to record the purchase of a machine on account that costs $20,000, set-up fees, $1,000, and freight, $500, would be:

What is the difference between an extraordinary repair and a betterment?

Budgeting for items such as equipment and furniture would be considered:

All of the following are intangible assets except:

Tangible assets include:

The depreciation method which charges more expense in earlier years than in later years is the:

Tender Years purchased a new van on January 1, 200x, for $40,000. The life of the van is 4 years or 100,000 miles, with an estimated residual value of $5,000. During the first year, the van was driven 20,000 miles. Compute the depreciation expense for the first year applying each of the methods below. a)________ Straight-line b)________ Units-of-production c)________ Double-declining-balance

If there are repairs needed in the process of installation, this should be charged to the cost of the machine.

Which depreciation method does not deduct residual value when computing depreciation expense?

For each of the following, identify in column 1 the category to which the account belongs, in column 2 the normal balance for the account, in column 3 the financial statement that the account in which the account balance is reported, and in column 4 the account's nature (permanent/temporary). -

Accumulated depletion should be reported as a(an)________ on the income statement.

According to the MACRS tax rate table, the following classes use straight-line depreciation:

If a coal deposit has 375,000 tons available and was purchased for $750,000, record the removal of 60,000 tons in year 1 and 80,000 tons in year 2.

In the last year of useful life, the salvage value was ignored using double-declining-balance depreciation. This error would cause:

A purchase of land and buildings would require the use of only one asset account, Land and Buildings.

For each of the following, identify in column 1 the category to which the account belongs, in column 2 the normal balance for the account, in column 3 the financial statement that the account in which the account balance is reported, and in column 4 the account's nature (permanent/temporary). -