Exam 10: Plant Assets,natural Resources,and Intangibles

On January 1,2018,Tyson Manufacturing Corporation purchased a machine for $40,000,000.Tyson's management expects to use the machine for 33,000 hours over the next six years.The estimated residual value of the machine at the end of the sixth year is $47,000.The machine was used for 4000 hours in 2018 and 5500 hours in 2019.What is the depreciation expense for 2018 if the corporation uses the units-of-production method of depreciation? (Round any intermediate calculations to two decimal places,and your final answer to the nearest dollar.)

Intangible assets ________.

An asset is considered to be obsolete ________.

Dynasty Corp sold a truck for $15,000 cash.It was originally purchased for $50,000 and had accumulated depreciation of $30,000 at the time of sale.Prepare the journal entry for the sale of truck.Omit explanation.

A company purchased a computer on July 1,2019 for $50,000.The estimated useful life of the computer was five years,and it has no residual value.Which of the following methods should be used to best match its expense against the revenue it produces?

The units-of-production method is used to compute depletion expense.

Hampton Company purchased a van on January 1,2018,for $800,000.Estimated life of the van was five years,and its estimated residual value was $90,000.Hampton uses the straight-line method of depreciation.Prepare the journal entry to record the depreciation expense for 2018 on the van.Omit explanation.

National Mining Company purchased a mine,which holds an estimated 40,000 tons of iron ore,on January 1,2018,for $524,000.The mine is expected to have zero residual value.The business extracted and sold 13,500 tons of ore in 2018 and 11,800 tons of ore in 2019.What is the depletion expense for 2018? (Round any intermediate calculations to two decimal places,and your final answer to the nearest dollar.)

Companies may choose to report plant assets as a single amount,with a note to the financial statements that provides detailed information,or companies may provide detailed information on the face of the statement.

If a company uses the contra account,Accumulated Amortization,this account is typically shown on the balance sheet.

Which of the following is NOT included as furniture and fixtures?

On October 1,2018,Natural Company purchased a patent for $100,000 cash.Although the patent gives legal protection for 20 years,it is expected to be used for only eight years.Journalize the purchase of the patent.Omit explanation.

Which of the following costs related to a business car would be capitalized?

A lump-sum purchase or basket purchase involves paying a single price for several assets as a group.

Installation costs are recorded as part of the cost of equipment.

A coal mine cost $1,001,000 and is estimated to hold 58,000 tons of coal.There is no residual value.During the first year of operations,6000 tons are extracted and sold.Calculate depletion expense for the first year.(Round any intermediate calculations to the nearest cent.)

An intangible asset is an asset with no physical form that is valuable because of the special rights it carries.

An exchange of plant assets has commercial substance if the future cash flows change as a result of the transaction.

Impairment of an intangible asset occurs when the book value of an asset is less than the fair value.

On January 1,2017,Apex Solutions paid $200,000 to acquire Fancy Phones Company,an electronic gadget-advertising website.At the time of the acquisition,Fancy Phones' balance sheet reported total assets of $200,000 and liabilities of $100,000.The fair market value of Fancy Phones' assets was $200,000.The fair market value of its liabilities was $100,000.At the end of 2020,goodwill was measured,and its fair value was determined to be $60,000.Record the impairment of goodwill.Omit explanation.