Exam 10: Long -Term Assets

The portion of a group purchase of land and building for $1,302,000 allocated to land,when the land is appraised at $340,000 and the building on the land is appraised at $1,020,000,is

Which of the following would not be considered a capital expenditure?

Which of the following would not be a basis for estimating the useful life of a piece of equipment?

Group depreciation is an appropriate method for a large company calculating depreciation on office equipment.

For tax purposes,small businesses may expense the first $250,000 of equipment expenditures,rather than having to allocate their costs over a number of years.

A negative free cash flow means that all cash commitments have been met.

Present two arguments in favor of the use of accelerated depreciation.

When depreciation rates are revised,an adjustment for previous years' depreciation must be recorded.

Which of the following accounting principles best justifies accelerated depreciation accounting?

Depreciation refers to the periodic allocation of the cost of a tangible long-lived asset over its estimated useful life.

Interest costs are included in the cost of an asset in conjunction with

Residual value is relevant when calculating double-declining-balance depreciation.

The Equipment account would include all of the following costs except

Horshack Mining Company purchases a gravel pit for $5,000,000.It estimates that 10,000,000 tons of gravel can be extracted over the pit's useful life.If 2,000,000 tons are extracted during the first year but only 1,440,000 tons are sold,what amount should be recorded for Gravel Inventory and Depletion Expense,respectively?

On January 2,2013,Topanga Company purchased a machine for $90,000.The machine has a five-year estimated useful life and a $6,000 estimated residual value.In addition,the company expects to use the machine 200,000 hours.Assuming that the machine was used 35,000 hours during 2014,complete the following chart.If a figure cannot be determined,indicate so by placing an "X" in the box.(Show your work. )

A company purchases land and a building on the land.The land is appraised at $96,000 and the building at $384,000.If the Land account is debited for $124,800,then the total purchase price for the land and building must have been

A contract limiting the rights of others to go into business in a specific industry or line of business for a specified period is called a

Dechter Company acquired a mine for $1,800,000 which has an estimated residual value of $300,000 and contains an estimated 1,500,000 tons of coal.If 230,000 tons of coal are mined and sold during the first year,the entry to record the depletion charge is:

Extraordinary repairs are recorded with a debit to Accumulated Depreciation.

In calculating the depletion of a natural resource,its useful life in years is irrelevant.