Exam 8: Operating Assets: Property, Plant, and Equipment, and Intangibles

For each of the following sentences ,select the word or group of words that best completes the statement. Patent Copyright Goodwill Revenue expenditure Natural resources Research and development costs Trademark Capital expenditure -_______________ is(are)a cost(s)that improves an operating asset and is (are)added to the asset account.

Waxman Company purchased a patent for $170,000 at the beginning of 2017 and estimated that its expected useful life was ten years.The patent has a legal life of 17 years.What amount should be recorded as amortization expense for the patent in 2017?

Please complete the following sentences: a.Accumulated amortization is used with _______________. b.Accumulated depreciation is used with _______________.

Borden Company incurred the following costs to acquire and prepare land for a new parking lot: purchase price for land,cost to clear the land,cost of paving,lighting for the parking lot,and landscaping for the parking lot.How should the company determine which costs should be recorded as Land Improvements and which cost should be recorded as Land?

Depreciation does not describe the increase or decrease in the market value of the asset.

When plant assets are reported,the current period's depreciation expense is subtracted from the original cost on the balance sheet.

Hu Corporation Use the following Assets section of Hu Corporation's balance sheets for the years ended December 31,2018 and 2017 to answer the questions that follow. ​ Hu Corporation recorded depreciation expense of $344 million for 2017. -Refer to the information for Hu Corporation. ? Required Calculate the following ratios for Hu for 2018. A.Average life of property,plant,and equipment B.Average age of property,plant,and equipment C.What information do these ratios provide to investors and creditors?

Acquisition cost includes all of the costs that are normal and necessary to acquire and maintain a plant asset over its useful life.

Oakland Corp.purchased land and a building for a combined cost of $500,000.Oakland must

Racer Company acquired patent rights on January 1,2014,for $1,080,000.The patent has a useful life equal to its legal life of 15 years.On January 2,2017,Racer successfully defended the patent in a lawsuit at a cost of $78,000. Required (1) Determine the patent amortization expense for the current year ended December $31,2017$ . (2) Analyze the impact of the adjusting entry to recognize the amortization.

Goodwill can be recorded as an asset when a(n)

A change in estimate should be recorded __________.

Chambersburg Corp. The following information is for Chambersburg Corp.for 2018 and 2017.Chambersburg uses the straight-line depreciation method. Property, plant, and equipment \ 250,000 \ 190,000 Accumulated depreciation 100,000 85,000 Depreciation expense 62,500 47,500 Net sales 1,000,000 900,000 Average total assets 625,000 475,000 -Refer to the information for Chambersburg Corp. ? Using the 2018 data,what is the average life of Chambersburg's property,plant,and equipment (rounded to one decimal place)?

Chambersburg Corp. The following information is for Chambersburg Corp.for 2018 and 2017.Chambersburg uses the straight-line depreciation method. Property, plant, and equipment \ 250,000 \ 190,000 Accumulated depreciation 100,000 85,000 Depreciation expense 62,500 47,500 Net sales 1,000,000 900,000 Average total assets 625,000 475,000 -Refer to the information for Chambersburg Corp. ? Between 2017 and 2018,Chambersburg sold some equipment that had an original cost of $57,500.Which statement is most likely true concerning transactions that must have occurred during the period?

Lenders are interested in the value of operating assets as collateral when making lending decisions.

Wexford Co. Wexford Co. purchased a new delivery truck at the beginning of 2017. The truck has a cost of $37,000, an estimated life of five years, and an estimated residual value of $7,000. A full year's depreciation expense is to be recorded in 2017. The truck was driven 20,000 miles during 2017 and 24,000 miles during 2018. The number of expected miles over five years is 100,000. -Refer to the information about Wexford Co. Wexford Co.wants to use the depreciation method that will result in the highest depreciation expense for 2017.Which method should be used?

Operating assets with no physical properties are called

On January 2,2017,Hannah Company sold a machine for $1,000 that it had used for several years.The machine cost $12,000 and had accumulated depreciation of $9,000 at the time of sale.What gain or loss will be reported on the income statement for the sale of the machine?

Which statement is true concerning operating assets?

On December 1,2017,Xeon Company bought land and an accompanying warehouse from Yen Company for $800,000.The fair market values of the land and the building at the time of purchase were $700,000 and $300,000,respectively.How much of the purchase price should Xeon Company allocate to the land,and how much should be allocated to the building?