Exam 10: Plant Assets,natural Resources,and Intangibles

On January 2,2017,Barnes Enterprises purchased equipment for $42,000 cash,expecting the equipment to remain in service for five years,with a $4,000 residual value.Barnes uses straight-line depreciation.On April 30,2019,Barnes sold the equipment for $20,000 cash. Requirement: Prepare the journal entries to record the purchase of the equipment; depreciation for 2017,2018,and 2019; and the sale of the equipment.Omit explanations and round to the nearest dollar.

Brentwood Auto Repair purchased a new machine and placed it in service on June 14.Which of the following is NOT included in the cost of equipment?

Millburn Company has acquired a property that included both land and a building for $530,000.The company hired an appraiser who has determined that the market value of the land is $320,000 and that of the building is $480,000.At what amount should the company record the cost of land? (Round any intermediate calculations to two decimal places,and your final answer to the nearest dollar.)

The cost paid to a laborer to assemble a desk is recorded as an expense.

Goodwill is the excess cost of an acquired company over the market value of its net assets.

When a company makes an accounting change in estimate,Generally Accepted Accounting Principles require that the company make changes to financial statements of prior years.

All plant assets are depreciated.

Which of the following is an asset that represents distinctive identifications of a product or service?

An asset is considered to be obsolete when a newer asset can perform the job more efficiently.

Provide definitions for the following terms. 1.Capitalize 2.Revenue Expenditure 3.Depreciation

Capitalizing a cost involves crediting the asset account.

Geller Electronics paid $200,000 to acquire Tabletz Company,an electronic gadget-advertising website.At the time of the acquisition,Tabletz's balance sheet reported total assets of $200,000 and liabilities of $100,000.The fair market value of Tabletz's assets was $200,000.The fair market value of its liabilities was $100,000.Journalize the acquisition of Tabletz in the books of Geller Electronics.Omit explanation.

The intellectual property of a business is easy to measure.

Newell Company has acquired land and paid $500 as a brokerage commission to acquire the land.However,the company's accountant has recorded the $500 as a revenue expenditure.What is the effect of this error?

The cost principle requires a business to record the assets acquired,or services received,at their actual cost.

Blueribbon Gallery reported the following assets on its December 31,2019 balance sheet: Dec. 31,2018 Dec. 31,2019 Cash \ 35,000 \ 28,000 Accounts Receivable 97,000 85,000 Merchandise Inventory 80,000 62,000 Prepaid Expenses 29,000 20,000 Property, plant, and equipment, net 30,000 18,000 If the net sales for the year amounted to $850,000,what is the asset turnover ratio for 2019?

Exchanges of plant assets that have commercial substance require any gain or loss on the transaction to be recognized.

Which of the following is included in the cost of a plant asset?

Equipment was acquired for $256,000 and has accumulated depreciation of $190,000.The business exchanges this equipment for new equipment.The new equipment has a market value of $209,000 and the business pays $157,000 cash.Assume the exchange has commercial substance.The exchange results in ________.

Which of the following items should be amortized?