Exam 18: Property, Plant, and Equipment

On, January 2, 2013, Rubble Sand and Gravel Company purchased equipment for $77,000. The equipment was to be used for five years and had a $2,000 estimated residual value. On January 2, 2013, equipment was sold for $30,000. Record the transactions on page 9 of a general journal. Omit descriptions.

The book value of an asset is usually the same as the fair market value of the asset.

An asset that cost $14,000 was sold for $9,000 cash. Accumulated depreciation on the asset was $7,000. The entry to record this transaction includes the recognition of

Depletion is the name given to the periodic allocation of the costs of assets created by human effort.

For federal income tax purposes, the depletion expense deducted from income is the larger of cost depletion or ___________.

Intangible assets may be purchased or developed. If developed, they are categorized as Research and Development and

Using the information shown, calculate the depreciation for 2013, 2014, and 2015 if ARB Company uses the straight-line method. Complete the journal entry for the depreciation expense for 2013.

The process by which the cost of natural resources extracted are allocated is

The entry to record the sale of equipment used in a business may include a debit to

When an asset is acquired by trading in an asset already owned in exchange for the new one, the amount received on the trade-in is called the ______________.

In 2013 a mining company paid $150,000 for mining rights. It is estimated that a total of 200,000 tons of ore are available to be extracted. During 2013, 18,000 tons of ore were mined. What is the amount of Depletion Expense recorded in the adjusting entry for 2013?

The cost of an intangible asset

Selected transactions of the Harrel Company are listed below. The company uses the straight-line method of depreciation. Record the transactions on page 9 of a general journal. Omit descriptions.

Dom's Delivery purchased a van for $32,000. The transportation charges were $400, sales tax was $2,240, and the license cost $250. Special shelving was installed in the van for $4,300. In addition, Dom had the company name painted on the doors. This cost the company $1,250. The total cost of the van to record in the proper asset account is

An example of real property is

The declining-balance method and the sum-of-the-years'-digits method are referred to as ____________________ methods of depreciation.

For financial accounting purposes, when an asset is traded in for a similar asset, a gain is reported if the trade-in allowance exceeds the book value of the asset traded in.

When an asset is traded for a similar asset, if the trade-in allowed is less than the book value of the asset, the loss is not recognized for financial accounting purposes.

Define intangible assets. List several examples of intangible assets. How are intangible assets handled for financial reporting if their lives can be estimated? How are they handled for financial reporting if their lives cannot be estimated?

A company uses the units-of-output method of computing depreciation on its fleet of cars. A car that costs $37,000 is expected to have a useful life of 120,000 miles and an expected salvage value of $1,000 at the end of its useful life. The rate for each mile is ___________________. (37000 - 1000)/120000.