Exam 7: Plant Assets, natural Resources, Intangibles

Land is purchased for $300,000.Back taxes paid by the purchaser were $8,500;total costs to demolish an existing building were $12,000 and the cost to clear the land was $22,000.The cost of paving the parking lot was $8,100.The cost of land is and the cost of land improvements is .

(Multiple Choice)

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Question 121

The impairment loss on long-term plant assets equals:

(Multiple Choice)

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Question 122

Return on assets measures how profitably management has used its assets.

(True/False)

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Question 123

Gains on the sale of equipment increase net income while losses on the sale of equipment decrease net income.

(True/False)

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Question 124

In 2019,the Best Diamond Company purchased mineral rights for a diamond mine (industrial grade diamonds)by signing a promissory note for $7,000,000.In addition to the purchase price,Best paid cash of $100,000 for a geological survey and $20,000 for a license fee to the country where the mine is located.It is estimated that there will be no residual value when the mine is fully depleted and that the mine contains 1,000,000 carats of diamonds. During the first year of mining,Best Diamond extracted 50,000 carats of diamonds which were not sold after they were extracted.In 2020,the company extracted 250,000 carats of diamonds and sold 200,000 carats of diamonds from its inventory. Required: Prepare the journal entry without explanations to: 1.Record the purchase of the diamond mineral rights. 2.Record depletion for 2019.

(Essay)

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Question 125

The depreciation process follows the ________ principle.

(Multiple Choice)

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Question 126

On January 2,2019,Mumford Corporation acquired equipment for $90,000.The estimated life of the equipment is 4 years.The estimated residual value is $3,000.What is the amount of depreciation expense for 2020,if the company uses the double-declining-balance method of depreciation? (Round intermediary calculations to two decimal places and your final answer to the nearest dollar. )

(Multiple Choice)

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Question 127

For a plant asset that wears out because of physical use rather than obsolescence,which depreciation method best meets the expense recognition principle?

(Multiple Choice)

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Question 128

Return on assets measures:

(Multiple Choice)

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Question 129

Martindale Motors purchased a machine that will help diagnose problems with engines that are used in its production department.The machine was purchased on January 1,2019 at a cost of $210,000.A residual value of $10,000 was estimated.The expected useful life is 5 years.In 2019,Martindale Motors has a gross profit of $400,000 and operating expenses of $180,000.The tax rate is 35%. Required: 1.Compute the depreciation expense for 2019 under both the straight-line and double-declining-balance depreciation methods. 2.What is the net cash saved if the accelerated depreciation method is used in 2019?

(Essay)

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Question 130

Gary Kraen Company purchased equipment on May 1,2019 for $800,000.The residual value is $10,000 and the estimated useful life is 10 years.What is the Depreciation Expense for the year ending December 31,2020,if the company uses the double-declining-balance method? (Round your final answer to the nearest dollar. )

(Multiple Choice)

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Question 131

The journal entry to record depreciation expense for equipment is:

(Multiple Choice)

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Question 132

Willis Company trades in a printing press for a newer model.The cost of the old printing press was $60,000,and accumulated depreciation up to the date of the trade-in is $43,000.The company also pays $43,000 cash for the newer printing press.The fair market value of the newer printing press is $70,000.The journal entry to acquire the new printing press will require a debit to Printing Press for:

(Multiple Choice)

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Question 133

Expenditures that extend a plant asset's useful life should be capitalized.

(True/False)

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Question 134

If a company capitalizes a cost that should have been expensed:

(Multiple Choice)

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Question 135

On January 2,2019,Kaiman Corporation acquired equipment for $700,000.The estimated life of the equipment is 5 years or 80,000 hours.The estimated residual value is $20,000.What is the balance in Accumulated Depreciation on December 31,2020,if Kaiman Corporation uses the straight-line method of depreciation?

(Multiple Choice)

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Question 136

Equipment purchased for $70,000 on January 1,2020,was sold on July 1,2023.The company uses the straight-line method of computing depreciation and recognizes $10,000 of depreciation expense annually.When recording the sale,the company should record a debit to Accumulated Depreciation-Equipment for:

(Multiple Choice)

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Question 137

Like U.S.GAAP,asset impairments under IFRS may be reversed in future periods for all types of long-term assets.

(True/False)

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Question 138

When an intangible asset is amortized:

(Multiple Choice)

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Question 139

What is the impairment test for long-term plant assets?

(Multiple Choice)

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Question 140

Showing 121 - 140 of 194

Land is purchased for $300,000.Back taxes paid by the purchaser were $8,500;total costs to demolish an existing building were $12,000 and the cost to clear the land was $22,000.The cost of paving the parking lot was $8,100.The cost of land is and the cost of land improvements is .

The impairment loss on long-term plant assets equals:

Return on assets measures how profitably management has used its assets.

Gains on the sale of equipment increase net income while losses on the sale of equipment decrease net income.

The depreciation process follows the ________ principle.

For a plant asset that wears out because of physical use rather than obsolescence,which depreciation method best meets the expense recognition principle?

Return on assets measures:

The journal entry to record depreciation expense for equipment is:

Expenditures that extend a plant asset's useful life should be capitalized.

If a company capitalizes a cost that should have been expensed:

Equipment purchased for $70,000 on January 1,2020,was sold on July 1,2023.The company uses the straight-line method of computing depreciation and recognizes $10,000 of depreciation expense annually.When recording the sale,the company should record a debit to Accumulated Depreciation-Equipment for:

Like U.S.GAAP,asset impairments under IFRS may be reversed in future periods for all types of long-term assets.

When an intangible asset is amortized:

What is the impairment test for long-term plant assets?

The Financial Statements

Transaction Analysis

Accrual Accounting Income

Internal Control Cash

Receivables and Revenue

Inventory Cost of Goods Sold

Current and Contingent Liabilities

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Investments

Time Value of Money

Filters

Exam 7: Plant Assets, natural Resources, Intangibles

Land is purchased for $300,000.Back taxes paid by the purchaser were $8,500;total costs to demolish an existing building were $12,000 and the cost to clear the land was $22,000.The cost of paving the parking lot was $8,100.The cost of land is ________ and the cost of land improvements is ________.

The impairment loss on long-term plant assets equals:

Return on assets measures how profitably management has used its assets.

Gains on the sale of equipment increase net income while losses on the sale of equipment decrease net income.

The depreciation process follows the ________ principle.

For a plant asset that wears out because of physical use rather than obsolescence,which depreciation method best meets the expense recognition principle?

Return on assets measures:

The journal entry to record depreciation expense for equipment is:

Expenditures that extend a plant asset's useful life should be capitalized.

If a company capitalizes a cost that should have been expensed:

Equipment purchased for $70,000 on January 1,2020,was sold on July 1,2023.The company uses the straight-line method of computing depreciation and recognizes $10,000 of depreciation expense annually.When recording the sale,the company should record a debit to Accumulated Depreciation-Equipment for:

Like U.S.GAAP,asset impairments under IFRS may be reversed in future periods for all types of long-term assets.

When an intangible asset is amortized:

What is the impairment test for long-term plant assets?

The Financial Statements

Transaction Analysis

Accrual Accounting Income

Internal Control Cash

Receivables and Revenue

Inventory Cost of Goods Sold

Current and Contingent Liabilities

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Investments

Time Value of Money

Filters

Land is purchased for $300,000.Back taxes paid by the purchaser were $8,500;total costs to demolish an existing building were $12,000 and the cost to clear the land was $22,000.The cost of paving the parking lot was $8,100.The cost of land is and the cost of land improvements is .