Exam 10: Plant Assets,natural Resources,and Intangibles

Depletion expense should not be recorded for natural resources because they do not decrease in value over time.

Dew Drops Company purchased equipment for $200,000.The company recorded total depreciation of $140,000.On January 1,2018,the company exchanges the equipment for new equipment,paying $150,000 cash.The fair market value of the new equipment is $250,000.Prepare the journal entry to record this transaction.Assume the exchange has commercial substance.Omit explanation.

The double-declining-balance method ignores the residual value until the depreciation expense takes the book value below the residual value.

The cost of an asset is $1,090,000,and its residual value is $300,000.Estimated useful life of the asset is eight years.Calculate depreciation for the first year using the double-declining-balance method of depreciation.(Do not round any intermediate calculations,and round your final answer to the nearest dollar.)

On January 1,2018,McHenry Manufacturing Company purchased a machine for $40,400,000.McHenry's management expects to use the machine for 34,000 hours over the next six years.The estimated residual value of the machine at the end of the sixth year is $50,000.The machine was used for 4600 hours in 2018 and 6000 hours in 2019.Calculate the book value of the machine at the end of 2019 if the company uses the units-of-production method of depreciation.(Round any intermediate calculations to two decimal places,and your final answer to the nearest dollar.)

When constructing a building for plant operations,payments for materials,labor,and miscellaneous costs are recorded as expenses.

On January 1,2019,a company acquired a truck for $100,000.Residual value was estimated to be $20,000.The truck can be driven for 50,000 miles over the next three years.Actual usage of the truck was recorded as 8,640 miles for the first year.Give the journal entry to record depreciation for the first year calculated as per the units-of-production method.(Do not round your intermediate calculations.)

A truck costs $316,000 and is expected to be driven 116,000 miles during its five-year life.Residual value is expected to be zero.If the truck is driven 27,000 miles during the first year,how much depreciation should the business record under the units-of-production method? (Round any intermediate calculations to two decimal places,and your final answer to the nearest dollar.)

U.S.Generally Accepted Accounting Principles permits the presentation of plant assets at their fair market value.

A photocopier cost $104,000 when new and has accumulated depreciation of $95,000.If the business discards this plant asset,the result is ________.

Estimated residual value can be zero if the company does not expect to receive anything when disposing of the asset.

Plant assets are long-lived,tangible assets used in the operation of a business.

A trademark represents the exclusive right to reproduce and sell a book,musical composition,film,other work of art,or intellectual property.

Which of the following requires businesses to record depreciation?

A natural resource is an asset that comes from the earth and is consumed.

The gain or loss on the sale of a plant asset is determined by comparing the market value of assets received with the ________ of asset sold.

For each of the following assets,provide a description and state the related expense. Asset Description Related Expense Plant Asset Natural Resource Intangible Asset

The process of allocating the cost of a plant asset over its useful life is known as cost reduction.

Which of the following is an intangible asset?

McArthur Company plans to develop a shopping center.In the first quarter,the following amounts were spent: Acquisition of land \ 21,000 Surveys and legal fees 1500 Land clearing 1000 Fencing 6000 Install lighting and signage 16,060 What amount should be recorded as the land improvements cost?