Question 1

Ordinary repairs to plant assets are referred to as revenue expenditures.

Accepted Answer

A) True 
 B)False  True

Question 2

The type of intangible asset related to the exclusive right to reproduce and sell a book or intellectual property is a ________.

Accepted Answer

A) franchise 
B) trademark 
C) copyright 
D) patent 
A) franchise 
B) trademark 
C) copyright 
D) patent C

Question 3

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

Accepted Answer

A) True 
 B)False  True

Question 4

The expected cash value of an asset at the end of its useful life is known as ________.

Accepted Answer

A) book value 
B) residual value 
C) carrying value 
D) market value 
A) book value 
B) residual value 
C) carrying value 
D) market value

Question 5

Acer,Inc.plans to develop a shopping center.In the first quarter,the following amounts were spent:
 
What amount should be recorded as the cost of the land in the corporation's books?

Accepted Answer

A) $25,300 
B) $18,300 
C) $20,060 
D) $24,100 
A) $25,300 
B) $18,300 
C) $20,060 
D) $24,100

Question 6

Equipment was purchased for $24,000 on January 1,2016.The equipment's estimated useful life was five years,and its residual value was $4,000.The straight-line method of depreciation was used.Calculate the gain or loss on sale if the equipment is sold for $18,000 on December 31,2016,the end of the accounting period.Prepare the journal entry to record the sale of equipment.

Accepted Answer

@#IMG-DLM& 
*Accumulated Depreciation: A

Question 7

On January 1,2017,Real Planes Manufacturing Corporation purchased a machine for $40,000,000.The corporation 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 corporation used the machine for 3,600 hours in 2017 and 5,000 hours in 2018.What is the book value of the machine at the end of year 2018 if the corporation uses double-declining-balance method of depreciation? (Round your intermediate calculations. )

Accepted Answer

Double-declining-balance depreciation =

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is the correct accounting treatment for a patent?

Accepted Answer

A) A patent must be shown as a current asset on the balance sheet. 
B) A patent must be depreciated or impaired,but not amortized. 
C) A patent must be capitalized and amortized over 20 years or less. 
D) A patent must be expensed,not capitalized,in the period in which it is purchased. 
A) A patent must be shown as a current asset on the balance sheet. 
B) A patent must be depreciated or impaired,but not amortized. 
C) A patent must be capitalized and amortized over 20 years or less. 
D) A patent must be expensed,not capitalized,in the period in which it is purchased.

Question 10

If an asset is disposed of when it is fully depreciated and has no residual value,the business does not need to make a journal entry because the book value is zero.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is a characteristic of a plant asset,such as a building?

Accepted Answer

A) It is used in the operations of a business. 
B) It is available for sale to customers in the ordinary course of business. 
C) It has a short useful life. 
D) It will have a negligible value at the end of its useful life. 
A) It is used in the operations of a business. 
B) It is available for sale to customers in the ordinary course of business. 
C) It has a short useful life. 
D) It will have a negligible value at the end of its useful life.

Question 12

All intangible assets must be amortized each year.

Accepted Answer

A) True 
 B)False

Question 13

On January 1,2017,Ellis,Inc.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.Journalize the amortization expense for 2017.Assume straight-line amortization.

Accepted Answer

@#IMG-DLM&
Explanation:
Amortization exp

Question 14

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 15

A coal mine cost $1,000,000 and is estimated to hold 52,000 tons of coal.There is no residual value.During the first year of operations,11,000 tons are extracted and sold.Calculate depletion expense for the first year.(Round any intermediate calculations to the nearest cent. )

Accepted Answer

A) $100,000 
B) $150,000 
C) $200,000 
D) $211,530 
A) $100,000 
B) $150,000 
C) $200,000 
D) $211,530

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

Which of the following statements,regarding the reporting of intangible assets,is correct?

Accepted Answer

A) If a company uses the contra account,Accumulated Amortization,this account typically shown on the balance sheet. 
B) Amortization expense is reported on the balance sheet. 
C) Intangible assets are shown only at their net book value. 
D) All intangible assets are shown on the balance sheet at fair market value on balance sheet date. 
A) If a company uses the contra account,Accumulated Amortization,this account typically shown on the balance sheet. 
B) Amortization expense is reported on the balance sheet. 
C) Intangible assets are shown only at their net book value. 
D) All intangible assets are shown on the balance sheet at fair market value on balance sheet date.

Question 18

Which of the following is an intangible asset?

Accepted Answer

A) plant and machinery 
B) goodwill 
C) building 
D) land 
A) plant and machinery 
B) goodwill 
C) building 
D) land

Question 19

A business,which has a calendar year accounting period,purchased an asset on March 1,2016.The business disposed of the asset on August 31,2017.For the calendar year 2017,depreciation should be calculated from January 1 to August 31.

Accepted Answer

A) True 
 B)False

Question 20

Roggers Corp.'s beginning and ending total assets in the year 2017 were $19,000,000 and $23,000,000,respectively.Its asset turnover ratio for the year was calculated to be 1.6 times.Calculate the amount of net sales for the year 2017.

Accepted Answer

A) $27,400,000 
B) $44,000,000 
C) $33,600,000 
D) $44,200,000 
A) $27,400,000 
B) $44,000,000 
C) $33,600,000 
D) $44,200,000

Exam 10: Plant Assets, natural Resources, and Intangibles

Ordinary repairs to plant assets are referred to as revenue expenditures.

The type of intangible asset related to the exclusive right to reproduce and sell a book or intellectual property is a ________.

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

The expected cash value of an asset at the end of its useful life is known as ________.

Acer,Inc.plans to develop a shopping center.In the first quarter,the following amounts were spent: What amount should be recorded as the cost of the land in the corporation's books?

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

Which of the following is the correct accounting treatment for a patent?

If an asset is disposed of when it is fully depreciated and has no residual value,the business does not need to make a journal entry because the book value is zero.

Which of the following is a characteristic of a plant asset,such as a building?

All intangible assets must be amortized each year.

On January 1,2017,Ellis,Inc.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.Journalize the amortization expense for 2017.Assume straight-line amortization.

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

A coal mine cost $1,000,000 and is estimated to hold 52,000 tons of coal.There is no residual value.During the first year of operations,11,000 tons are extracted and sold.Calculate depletion expense for the first year.(Round any intermediate calculations to the nearest cent. )

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

Which of the following statements,regarding the reporting of intangible assets,is correct?

Which of the following is an intangible asset?

A business,which has a calendar year accounting period,purchased an asset on March 1,2016.The business disposed of the asset on August 31,2017.For the calendar year 2017,depreciation should be calculated from January 1 to August 31.

Roggers Corp.'s beginning and ending total assets in the year 2017 were $19,000,000 and $23,000,000,respectively.Its asset turnover ratio for the year was calculated to be 1.6 times.Calculate the amount of net sales for the year 2017.

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

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