Question 1

A plant asset is fully depreciated when the book value is ________.

Accepted Answer

A) greater than the residual value 
B) greater than the market value 
C) equal to the residual value 
D) equal to the market value 
A) greater than the residual value 
B) greater than the market value 
C) equal to the residual value 
D) equal to the market value

Question 2

The cost of an asset is $1,160,000,and its residual value is $160,000.Estimated useful life of the asset is four 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. )

Accepted Answer

A) $500,000 
B) $580,000 
C) $290,000 
D) $250,000 
A) $500,000 
B) $580,000 
C) $290,000 
D) $250,000

Question 3

Depreciation is the allocation of a plant asset's cost to expense over its useful life.

Accepted Answer

A) True 
 B)False

Question 4

Rightz Petroleum Products owns furniture that was purchased for $20,000.Accumulated depreciation is $16,000.The furniture was sold for $3,800.Prepare the journal entry to record this transaction.

Accepted Answer

The answer of Rightz Petroleum Products owns furniture that was...

Question 5

Prinkle Corporation purchased equipment for $56,000 on January 1,2016.On December 31,2018,the equipment was sold for $23,000.Accumulated Depreciation as of December 31,2018 was $32,000.
Calculate gain or loss on the sale.

Accepted Answer

A) $1,000 gain 
B) $1,000 loss 
C) $32,000 loss 
D) no gain no loss 
A) $1,000 gain 
B) $1,000 loss 
C) $32,000 loss 
D) no gain no loss

Question 6

Which of the following asset categories would include the cost of clearing land and removing unwanted buildings?

Accepted Answer

A) land 
B) buildings 
C) land improvements 
D) machinery and equipment 
A) land 
B) buildings 
C) land improvements 
D) machinery and equipment

Question 7

Which of the following statements is incorrect?

Accepted Answer

A) The life cycle of a plant asset includes: acquisition,usage,and disposal. 
B) Depreciation is recorded on all plant assets. 
C) Plant assets not currently being used in business operations are classified as long-term investments. 
D) Plant assets are long-lived tangible assets used in the operations of a business. 
A) The life cycle of a plant asset includes: acquisition,usage,and disposal. 
B) Depreciation is recorded on all plant assets. 
C) Plant assets not currently being used in business operations are classified as long-term investments. 
D) Plant assets are long-lived tangible assets used in the operations of a business.

Question 8

Which of the following is true when the estimate of an asset's useful life is changed?

Accepted Answer

A) The new estimate is ignored until the last year of the asset's life. 
B) The depreciation expense in the prior year is restated. 
C) Prior years' financial statements must be restated. 
D) The asset's remaining depreciable book value will be spread over the asset's remaining life. 
A) The new estimate is ignored until the last year of the asset's life. 
B) The depreciation expense in the prior year is restated. 
C) Prior years' financial statements must be restated. 
D) The asset's remaining depreciable book value will be spread over the asset's remaining life.

Question 9

MacLean Corp.purchased a mine on January 1,2016,for $500,000 .The mine is estimated to contain 30,000 tons of iron ore.There is no residual value.The business has extracted and sold 2,500 tons of ore in 2016.Prepare the journal entry to record depletion expense for 2016.(Round your intermediate calculations to the nearest cent. )

Accepted Answer

@#IMG-DLM&
Explanation:
Depletion per unit = (Cost

Question 10

Fleetwood Corp.purchased a mine in 2016 for $500,000 and estimated that 30,000 tons of iron ore could be extracted from it.There was no residual value.The business extracted and sold 2,500 tons of ore in 2016.How will the mine be reported on the balance sheet at the end of year 2016? (Round all intermediate calculations to the nearest cent. )

Accepted Answer

@#IMG-DLM&
Explanation:
Depletion per unit = (Cost

Question 11

During 2017,Sanchez Corp.had net sales of $17,100,000.The beginning total assets were $8,500,000.The asset turnover ratio was 2 times.Calculate the ending total assets of Sanchez.(Round any intermediate calculations to two decimal places,and your final answer to the nearest dollar. )

Accepted Answer

A) $8,600,000 
B) $8,500,000 
C) $17,050,000 
D) $8,550,000 
A) $8,600,000 
B) $8,500,000 
C) $17,050,000 
D) $8,550,000

Question 12

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.Prepare the journal entry to record the sale of the equipment for $25,000 on January 3,2017.The company has a calendar year accounting period.

Accepted Answer

@#IMG-DLM& 
*Accumulated Depreciation: A

Question 13

Regarding impairment of intangible assets,which of the following statements is incorrect?

Accepted Answer

A) Impairment occurs when the fair value of an intangible asset is less than the book value. 
B) Intangible assets are impaired when there has been a permanent decline in the value of the asset. 
C) Intangible assets are tested for impairment annually. 
D) If any impairment occurs,the company records a loss in the period in which the intangible asset was acquired. 
A) Impairment occurs when the fair value of an intangible asset is less than the book value. 
B) Intangible assets are impaired when there has been a permanent decline in the value of the asset. 
C) Intangible assets are tested for impairment annually. 
D) If any impairment occurs,the company records a loss in the period in which the intangible asset was acquired.

Question 14

A coal mine cost $1,008,000 and is estimated to hold 53,000 tons of coal.There is no residual value.During the first year of operations,11,000 tons are extracted and sold.Calculate depletion per unit.(Round your answer to the nearest cent. )

Accepted Answer

A) $9.51 
B) $4.76 
C) $19.02 
D) $14.26 
A) $9.51 
B) $4.76 
C) $19.02 
D) $14.26

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

Baker,Inc.had reported the following details for the year ended December 31,2017:
 
The company's beginning total assets and liabilities were $16,000,000 and $9,700,000,respectively.Calculate the asset turnover ratio for 2017.

Accepted Answer

A) 2.19 times 
B) 1.19 times 
C) 1.72 times 
D) 1.56 times 
A) 2.19 times 
B) 1.19 times 
C) 1.72 times 
D) 1.56 times

Question 18

A machine that was purchased for $110,000 has accumulated depreciation of $90,000.The business exchanges the machine for a new one.The new machine has a market value of $140,000,and the business pays $110,000 cash.Assume the exchange has commercial substance.This exchange results in a ________.

Accepted Answer

A) gain of $10,000 
B) gain of $5,000 
C) loss of $10,000 
D) loss of $20,000 
A) gain of $10,000 
B) gain of $5,000 
C) loss of $10,000 
D) loss of $20,000

Question 19

The cost of an asset is $10,000,000,and its residual value is $100,000.Estimated useful life of the asset is four years.Prepare the schedule of depreciation using the double-declining-balance method of accounting.

Accepted Answer

@#IMG-DLM& *(1,250,0

Question 20

Charlie 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.

Accepted Answer

The answer of Charlie Corp sold a truck for $15,000...

Exam 10: Plant Assets, natural Resources, and Intangibles

A plant asset is fully depreciated when the book value is ________.

Depreciation is the allocation of a plant asset's cost to expense over its useful life.

Rightz Petroleum Products owns furniture that was purchased for $20,000.Accumulated depreciation is $16,000.The furniture was sold for $3,800.Prepare the journal entry to record this transaction.

Prinkle Corporation purchased equipment for $56,000 on January 1,2016.On December 31,2018,the equipment was sold for $23,000.Accumulated Depreciation as of December 31,2018 was $32,000. Calculate gain or loss on the sale.

Which of the following asset categories would include the cost of clearing land and removing unwanted buildings?

Which of the following statements is incorrect?

Which of the following is true when the estimate of an asset's useful life is changed?

During 2017,Sanchez Corp.had net sales of $17,100,000.The beginning total assets were $8,500,000.The asset turnover ratio was 2 times.Calculate the ending total assets of Sanchez.(Round any intermediate calculations to two decimal places,and your final answer to the nearest dollar. )

Regarding impairment of intangible assets,which of the following statements is incorrect?

A coal mine cost $1,008,000 and is estimated to hold 53,000 tons of coal.There is no residual value.During the first year of operations,11,000 tons are extracted and sold.Calculate depletion per unit.(Round your answer to the nearest cent. )

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

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

Baker,Inc.had reported the following details for the year ended December 31,2017: The company's beginning total assets and liabilities were $16,000,000 and $9,700,000,respectively.Calculate the asset turnover ratio for 2017.

A machine that was purchased for $110,000 has accumulated depreciation of $90,000.The business exchanges the machine for a new one.The new machine has a market value of $140,000,and the business pays $110,000 cash.Assume the exchange has commercial substance.This exchange results in a ________.

The cost of an asset is $10,000,000,and its residual value is $100,000.Estimated useful life of the asset is four years.Prepare the schedule of depreciation using the double-declining-balance method of accounting.

Charlie 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.

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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