Question 1

The asset turnover ratio is calculated by dividing cost of goods sold by average total assets.

Accepted Answer

A) True 
 B)False

Question 2

A fully depreciated plant asset ________.

Accepted Answer

A)  is no longer reported on the balance sheet 
B)  can be discarded, sold, or exchanged for another plant asset 
C)  can no longer be used in the business 
D)  is removed from the accounting records 
A)  is no longer reported on the balance sheet 
B)  can be discarded, sold, or exchanged for another plant asset 
C)  can no longer be used in the business 
D)  is removed from the accounting records

Question 3

Regardless of the type of plant asset disposal,the first step is to bring the depreciation up to date.

Accepted Answer

A) True 
 B)False

Question 4

Adkins Bakery uses the modified half-month convention to calculate depreciation expense in the year an asset is purchased or sold.Adkins has a calendar year accounting period and uses the straight-line method to compute depreciation expense.On March 17,2018,Adkins acquired equipment at a cost of $200,000.The equipment has a residual value of $45,000 and an estimated useful life of 3 years.What amount of depreciation expense will be recorded for the year ending December 31,2018? (Round any intermediate calculations to two decimal places,and your final answer to the nearest dollar.)

Accepted Answer

A)  $51,667 
B)  $43,056 
C)  $38,750 
D)  $25,833 
A)  $51,667 
B)  $43,056 
C)  $38,750 
D)  $25,833

Question 5

A coal mine cost $1,009,000 and is estimated to hold 57,000 tons of coal.There is no residual value.During the first year of operations,12,000 tons are extracted and sold.Calculate depletion per unit.(Round your answer to the nearest cent.)

Accepted Answer

A)  $8.85 
B)  $4.43 
C)  $17.70 
D)  $13.27 
A)  $8.85 
B)  $4.43 
C)  $17.70 
D)  $13.27

Question 6

Which of the following is TRUE of goodwill?

Accepted Answer

A)  Goodwill must be capitalized when acquired and amortized over seven years or less. 
B)  Both created and acquired goodwill must be recorded in the books. 
C)  Goodwill must be expensed when acquired. 
D)  Goodwill is not amortized. 
A)  Goodwill must be capitalized when acquired and amortized over seven years or less. 
B)  Both created and acquired goodwill must be recorded in the books. 
C)  Goodwill must be expensed when acquired. 
D)  Goodwill is not amortized.

Question 7

Great Plains Company has acquired a property that included both land and a building for $500,000.The company paid cash.The company hired an appraiser who has determined that the market value of the land is $300,000 and that of the building is $400,000.Journalize the lump-sum purchase.Omit explanation.(Round any intermediate calculations to two decimal places,and your final answer to the nearest dollar.)

Accepted Answer

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Question 8

For exchanges of plant assets with commercial substance,the new asset received will be recorded at its market value.

Accepted Answer

A) True 
 B)False

Question 9

Wash N' Dry Company purchased equipment for $45,000.Total depreciation of $36,000 was recorded.On January 1,2017,Wash N' Dry exchanges the equipment for new equipment,paying $54,000 cash.The market value of the new equipment is $65,000.Prepare the journal entry to record this transaction.Assume the exchange has commercial substance.Omit explanation.

Accepted Answer

Calculation of gain

Question 10

An oil well cost $1,782,500 and is calculated to hold 150,000 barrels of oil.There is no residual value.Which journal entry is needed to record the expense for the extraction of 40,000 barrels of oil during the year? All 40,000 barrels were sold during the year.(Round any intermediate calculations to the nearest cent,and your final answer to the nearest dollar.)

Accepted Answer

A)  $$\begin{array} { | c | r | r | } 
\hline \text { Cost of Goods Sold - Oil Reserve } & 475,200 & \
\hline \text { Accumulated Depletion - Oil Reserve } & & 475,200 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | c | r | r | } 
\hline \text { Depletion Expense - Oil Reserve } & 475,200 & \
\hline \text { Oil Revenue } & & 475,200 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | c | r | r | } 
\hline \text { Depletion Expense - Oil Reserve } & 475,200 & \
\hline \text { Accumulated Depletion - Oil Reserve } & & 475,200 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | c | r | r | } 
\hline \text { Oil Reserve Inventory } & 475,200 & \
\hline \text { Accumulated Depletion - Oil Reserve } & & 475,200 \
\hline
\end{array}$$ 
A)  $$\begin{array} { | c | r | r | } 
\hline \text { Cost of Goods Sold - Oil Reserve } & 475,200 & \
\hline \text { Accumulated Depletion - Oil Reserve } & & 475,200 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | c | r | r | } 
\hline \text { Depletion Expense - Oil Reserve } & 475,200 & \
\hline \text { Oil Revenue } & & 475,200 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | c | r | r | } 
\hline \text { Depletion Expense - Oil Reserve } & 475,200 & \
\hline \text { Accumulated Depletion - Oil Reserve } & & 475,200 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | c | r | r | } 
\hline \text { Oil Reserve Inventory } & 475,200 & \
\hline \text { Accumulated Depletion - Oil Reserve } & & 475,200 \
\hline
\end{array}$$

Question 11

Classify each of the following expenditures as capital expenditure (CE)or revenue expenditure (RE).
1.________ Repair of transmission or engine
2.________ Sales tax paid on the purchase price
3.________ Training of personnel for initial operation of machinery
4,________ Modification for new use

Accepted Answer

1.RE; 2.CE

Question 12

Westin Delivery Service Company owns a delivery truck.Which of the following costs,associated with the truck,will be treated as a revenue expenditure?

Accepted Answer

A)  oil change and lubrication 
B)  major engine overhaul 
C)  modification for new use 
D)  addition to storage capacity 
A)  oil change and lubrication 
B)  major engine overhaul 
C)  modification for new use 
D)  addition to storage capacity

Question 13

On January 1,2019,Ennis Company purchased a patent for $200,000 cash.Although the patent gives legal protection for 20 years,the patent is expected to be used for only 10 years.The patent has no residual value.Journalize the amortization expense for 2019.Assume straight-line amortization.Omit explanation.

Accepted Answer

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Question 14

The cost of furniture and fixtures includes all costs to ready the asset for its intended use.

Accepted Answer

A) True 
 B)False

Question 15

On January 1,2018,Forrest Manufacturing Company purchased a machine for $40,000,000.The company expects to use the machine for 24,000 hours over the next six years.The estimated residual value of the machine at the end of the sixth year is $40,000.The company used the machine for 3,600 hours in 2018 and 5,000 hours in 2019.What is the depreciation expense for 2018 and 2019 if the company uses the double-declining-balance method of depreciation?

Accepted Answer

Double-declining-balance depreciation =

Question 16

When a business sells a plant asset for book value,a gain or loss should be recorded.

Accepted Answer

A) True 
 B)False

Question 17

The process by which businesses allocate a natural resource's cost to expense over its usage is known as depreciation.

Accepted Answer

A) True 
 B)False

Question 18

Under U.S.GAAP,which of the following is NOT an acceptable way to report plant assets?

Accepted Answer

A)  at fair market value 
B)  at book value 
C)  as a single amount, with a note to the financial statements that provides detailed information 
D)  with detailed information on the face of the balance sheet 
A)  at fair market value 
B)  at book value 
C)  as a single amount, with a note to the financial statements that provides detailed information 
D)  with detailed information on the face of the balance sheet

Question 19

On January 1,2017,Dennis Supply purchased equipment for $60,000 cash,expecting it to remain in service for six years.The equipment is depreciated using the straight-line method with $2,000 estimated residual value.On April 30,2019,the equipment was sold for $48,000 cash.Record depreciation expense for 2019 and the sale of the equipment on April 30,2019.(Round all intermediate calculations to two decimal places.Round final numbers to nearest dollar.)Omit explanations.

Accepted Answer

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\hlin

Question 20

The cost of land does not include the cost of fencing and paving.

Accepted Answer

A) True 
 B)False

The asset turnover ratio is calculated by dividing cost of goods sold by average total assets.

A fully depreciated plant asset ________.

Regardless of the type of plant asset disposal,the first step is to bring the depreciation up to date.

A coal mine cost $1,009,000 and is estimated to hold 57,000 tons of coal.There is no residual value.During the first year of operations,12,000 tons are extracted and sold.Calculate depletion per unit.(Round your answer to the nearest cent.)

Which of the following is TRUE of goodwill?

For exchanges of plant assets with commercial substance,the new asset received will be recorded at its market value.

Classify each of the following expenditures as capital expenditure (CE)or revenue expenditure (RE). 1. Repair of transmission or engine 2. Sales tax paid on the purchase price 3. Training of personnel for initial operation of machinery 4, Modification for new use

Westin Delivery Service Company owns a delivery truck.Which of the following costs,associated with the truck,will be treated as a revenue expenditure?

The cost of furniture and fixtures includes all costs to ready the asset for its intended use.

When a business sells a plant asset for book value,a gain or loss should be recorded.

The process by which businesses allocate a natural resource's cost to expense over its usage is known as depreciation.

Under U.S.GAAP,which of the following is NOT an acceptable way to report plant assets?

The cost of land does not include the cost of fencing and paving.

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandise Inventory

Accounting Information Systems

Internal Control and Cash

Receivables

Current Liabilities and Payroll

Partnerships

Corporations

Long-Term Liabilities

Investments

The Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets

Flexible Budgets and Standard Cost Systems

Cost Allocation and Responsibility Accounting

Short-Term Business Decisions

Capital Investment Decisions

Filters

Exam 10: Plant Assets,natural Resources,and Intangibles

The asset turnover ratio is calculated by dividing cost of goods sold by average total assets.

A fully depreciated plant asset ________.

Regardless of the type of plant asset disposal,the first step is to bring the depreciation up to date.

A coal mine cost $1,009,000 and is estimated to hold 57,000 tons of coal.There is no residual value.During the first year of operations,12,000 tons are extracted and sold.Calculate depletion per unit.(Round your answer to the nearest cent.)

Which of the following is TRUE of goodwill?

For exchanges of plant assets with commercial substance,the new asset received will be recorded at its market value.

Classify each of the following expenditures as capital expenditure (CE)or revenue expenditure (RE). 1.________ Repair of transmission or engine 2.________ Sales tax paid on the purchase price 3.________ Training of personnel for initial operation of machinery 4,________ Modification for new use

Westin Delivery Service Company owns a delivery truck.Which of the following costs,associated with the truck,will be treated as a revenue expenditure?

The cost of furniture and fixtures includes all costs to ready the asset for its intended use.

When a business sells a plant asset for book value,a gain or loss should be recorded.

The process by which businesses allocate a natural resource's cost to expense over its usage is known as depreciation.

Under U.S.GAAP,which of the following is NOT an acceptable way to report plant assets?

The cost of land does not include the cost of fencing and paving.

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandise Inventory

Accounting Information Systems

Internal Control and Cash

Receivables

Current Liabilities and Payroll

Partnerships

Corporations

Long-Term Liabilities

Investments

The Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets

Flexible Budgets and Standard Cost Systems

Cost Allocation and Responsibility Accounting

Short-Term Business Decisions

Capital Investment Decisions

Filters

Classify each of the following expenditures as capital expenditure (CE)or revenue expenditure (RE). 1. Repair of transmission or engine 2. Sales tax paid on the purchase price 3. Training of personnel for initial operation of machinery 4, Modification for new use