Question 1

Property, plant and equipment are:

Accepted Answer

A)  Tangible assets used in the operation of a business that have a useful life of more than one accounting period. 
B)  Current assets. 
C)  Held for sale. 
D)  Intangible assets used in the operations of a business that have a useful life of more than one accounting period. 
E)  Tangible assets used in the operation of business that have a useful life of less than one accounting period. 
A)  Tangible assets used in the operation of a business that have a useful life of more than one accounting period. 
B)  Current assets. 
C)  Held for sale. 
D)  Intangible assets used in the operations of a business that have a useful life of more than one accounting period. 
E)  Tangible assets used in the operation of business that have a useful life of less than one accounting period.

Question 2

A patent is an exclusive right granted to its owner to manufacture and sell a patented device or to use a process for 20 years.

Accepted Answer

A) True 
 B)False

Question 3

Capital expenditures:

Accepted Answer

A)  Are revenue expenditures. 
B)  Extend an asset's useful life beyond its original estimate. 
C)  Are credited to accumulated depreciation. 
D)  Are additional costs of plants assets that do not materially increase the asset's life. 
E)  Are expensed as incurred. 
A)  Are revenue expenditures. 
B)  Extend an asset's useful life beyond its original estimate. 
C)  Are credited to accumulated depreciation. 
D)  Are additional costs of plants assets that do not materially increase the asset's life. 
E)  Are expensed as incurred.

Question 4

A depreciable asset costing $75,000 is purchased on September 1, Year 1. The asset is estimated to have a residual value of $10,000 and an estimated useful life of 4 years. Double-declining-balance depreciation is used. If the asset is sold on December 31, Year 3 for $13,000, the journal entry to record the sale will include:

Accepted Answer

A)  A credit to gain on sale for $8,000. 
B)  A debit to loss on sale for $2,625. 
C)  A credit to accumulated depreciation for $59,375. 
D)  A debit to loss on sale for $3,042. 
E)  A credit to gain on sale for $4,979. 
A)  A credit to gain on sale for $8,000. 
B)  A debit to loss on sale for $2,625. 
C)  A credit to accumulated depreciation for $59,375. 
D)  A debit to loss on sale for $3,042. 
E)  A credit to gain on sale for $4,979.

Question 5

The carrying amount of an asset when using double-declining-balance depreciation is always greater than the carrying amount from using straight-line depreciation, except at the beginning and the end of the asset's useful life, when it is the same.

Accepted Answer

A) True 
 B)False

Question 6

Revising an estimate of the useful life or residual value of an item of property, plant and equipment is referred to as a change in accounting estimate, and is reflected in the past, current, and future financial statements.

Accepted Answer

A) True 
 B)False

Question 7

A company purchased property for a building site. The costs associated with the property were: What portion of these costs should be allocated to the cost of the land and what portion should be allocated to the cost of the new building?

Accepted Answer

A)  $175,800 to Land; $18,800 to Building. 
B)  $190,000 to Land; $3,800 to Building. 
C)  $190,800 to Land; $1,000 to Building. 
D)  $192,800 to Land; $0 to Building. 
E)  $193,800 to Land; $0 to Building. 
A)  $175,800 to Land; $18,800 to Building. 
B)  $190,000 to Land; $3,800 to Building. 
C)  $190,800 to Land; $1,000 to Building. 
D)  $192,800 to Land; $0 to Building. 
E)  $193,800 to Land; $0 to Building.

Question 8

A company purchased a cash register on January 1 for $5,400. This register has a useful life of 10 years and a residual value of $400. What would be the depreciation expense for the second year of its useful life using the double-declining-balance method?

Accepted Answer

A)  $500. 
B)  $800. 
C)  $864. 
D)  $1,000. 
E)  $1,080. 
A)  $500. 
B)  $800. 
C)  $864. 
D)  $1,000. 
E)  $1,080.

Question 9

On January 2, 2007, a company purchased a delivery truck for $45,000 cash. The truck had an estimated useful life of seven years and an estimated residual value of $3,000. The straight-line method of depreciation was used. Prepare the journal entries to record depreciation expense and the disposition of the truck on September 1, 2011, under the following assumptions:
The truck and $45,000 cash were given in exchange for a new delivery truck that had a cash price of $60,000. This transaction has commercial substance.

Accepted Answer

2010: $230,000/$150,000 = 1.53
2011: $28

Question 10

Revenue expenditures:

Accepted Answer

A)  Are additional costs of property, plant and equipment that do not materially increase the asset's life or its productive capabilities. 
B)  Are known as balance sheet expenditures. 
C)  Extend the asset's useful life. 
D)  Substantially benefit future periods. 
E)  Are debited to asset accounts. 
A)  Are additional costs of property, plant and equipment that do not materially increase the asset's life or its productive capabilities. 
B)  Are known as balance sheet expenditures. 
C)  Extend the asset's useful life. 
D)  Substantially benefit future periods. 
E)  Are debited to asset accounts.

Question 11

A company had average total assets of $897,000. Its gross sales were $1,090,000 and its net sales were $1,000,000. The company's total asset turnover equals:

Accepted Answer

A)  0.82. 
B)  0.90. 
C)  1.09. 
D)  1.11. 
E)  1.26. 
A)  0.82. 
B)  0.90. 
C)  1.09. 
D)  1.11. 
E)  1.26.

Question 12

Describe the accounting for intangible assets, including their acquisition, cost allocation, and accounts involved.

Accepted Answer

Intangible assets are recorded at acquis

Question 13

Prepare journal entries to record the following transactions of a company during the current year:

Accepted Answer

The answer of Prepare journal entries to record the following...

Question 14

The double-declining balance method is applied by (1) computing the asset's straight-line depreciation rate, (2) doubling it, (3) subtracting residual value from cost, and (4) multiplying the rate times the net value.

Accepted Answer

A) True 
 B)False

Question 15

A company purchased a delivery van for $23,000 with a residual value of $3,000 on September 1, Year 1. It has an estimated useful life of 5 years. Using the straight-line method, how much depreciation expense should the company recognize on December 31, Year 1?

Accepted Answer

A)  $1,000. 
B)  $1,333. 
C)  $1,533. 
D)  $4,000. 
E)  $4,600. 
A)  $1,000. 
B)  $1,333. 
C)  $1,533. 
D)  $4,000. 
E)  $4,600.

Question 16

Salta Company installs a manufacturing machine in its factory at the beginning of the year at a cost of $87,000. The machine's useful life is estimated to be 5 years, or 400,000 units of product, with a $7,000 residual value. During its second year, the machine produces 84,500 units of product. Determine the machines' second year depreciation under the units-of-production method.

Accepted Answer

A)  $16,900. 
B)  $16,000. 
C)  $17,400. 
D)  $18,379. 
E)  $20,880. 
A)  $16,900. 
B)  $16,000. 
C)  $17,400. 
D)  $18,379. 
E)  $20,880.

Question 17

A company purchased property for $100,000. The property included a building, a parking lot, and land. The building was appraised at $62,000; the land at $45,000, and the parking lot at $18,000. Land should be recorded in the accounting records with an allocated cost of:

Accepted Answer

A)  $0. 
B)  $36,000. 
C)  $42,000. 
D)  $45,000. 
E)  $100,000. 
A)  $0. 
B)  $36,000. 
C)  $42,000. 
D)  $45,000. 
E)  $100,000.

Question 18

When originally purchased, a vehicle had an estimated useful life of 8 years. The vehicle cost $23,000 and its estimated residual value is $1,500. After 4 years of straight-line depreciation, the asset's total estimated useful life was revised from 8 years to 6 years and there was no change in the estimated residual value. The depreciation expense in year 5 equals:

Accepted Answer

A)  $5,375.00. 
B)  $2,687.50. 
C)  $5,543.75. 
D)  $10,750.00. 
E)  $2,856.25. 
A)  $5,375.00. 
B)  $2,687.50. 
C)  $5,543.75. 
D)  $10,750.00. 
E)  $2,856.25.

Question 19

A patent:

Accepted Answer

A)  Gives its owner the exclusive right to publish and sell a musical or literary work during the life of the creator plus 70 years. 
B)  Gives its owner an exclusive right to manufacture and sell a patented item or to use a process for 20 years. 
C)  Gives its owner an exclusive right to manufacture and sell a device or to use a process for 50 years. 
D)  Is the amount by which the value of a company exceeds the fair market value of a company's net assets if purchased separately. 
E)  Gives its owner the exclusive right to publish and sell a musical or literary work during the life of the creator plus 17 years. 
A)  Gives its owner the exclusive right to publish and sell a musical or literary work during the life of the creator plus 70 years. 
B)  Gives its owner an exclusive right to manufacture and sell a patented item or to use a process for 20 years. 
C)  Gives its owner an exclusive right to manufacture and sell a device or to use a process for 50 years. 
D)  Is the amount by which the value of a company exceeds the fair market value of a company's net assets if purchased separately. 
E)  Gives its owner the exclusive right to publish and sell a musical or literary work during the life of the creator plus 17 years.

Question 20

Record the following events and transactions for Axle Company for the current year.
1. On January 2, Axle purchased a patent for $35,000 with a useful life of 10 years. Prepare the journal entry to amortize the patent at the end of the first year.
2. On January 4, Axle purchased a music distributor's collection of lyrics and songs for $1,425,000. The copyrights are expected to last another 30 years. Prepare the journal entry to amortize the copyright at the end of the first year.

Accepted Answer

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Property, plant and equipment are:

A patent is an exclusive right granted to its owner to manufacture and sell a patented device or to use a process for 20 years.

Capital expenditures:

The carrying amount of an asset when using double-declining-balance depreciation is always greater than the carrying amount from using straight-line depreciation, except at the beginning and the end of the asset's useful life, when it is the same.

Revising an estimate of the useful life or residual value of an item of property, plant and equipment is referred to as a change in accounting estimate, and is reflected in the past, current, and future financial statements.

A company purchased property for a building site. The costs associated with the property were: What portion of these costs should be allocated to the cost of the land and what portion should be allocated to the cost of the new building?

A company purchased a cash register on January 1 for $5,400. This register has a useful life of 10 years and a residual value of $400. What would be the depreciation expense for the second year of its useful life using the double-declining-balance method?

Revenue expenditures:

A company had average total assets of $897,000. Its gross sales were $1,090,000 and its net sales were $1,000,000. The company's total asset turnover equals:

Describe the accounting for intangible assets, including their acquisition, cost allocation, and accounts involved.

Prepare journal entries to record the following transactions of a company during the current year:

The double-declining balance method is applied by (1) computing the asset's straight-line depreciation rate, (2) doubling it, (3) subtracting residual value from cost, and (4) multiplying the rate times the net value.

A company purchased a delivery van for $23,000 with a residual value of $3,000 on September 1, Year 1. It has an estimated useful life of 5 years. Using the straight-line method, how much depreciation expense should the company recognize on December 31, Year 1?

A company purchased property for $100,000. The property included a building, a parking lot, and land. The building was appraised at $62,000; the land at $45,000, and the parking lot at $18,000. Land should be recorded in the accounting records with an allocated cost of:

A patent:

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Cost Accounting

Process Cost Accounting

Cost Allocation and Performance Measurement

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Capital Budgeting and Managerial Decisions

Filters

Exam 10: Long-Term Assets

Property, plant and equipment are:

A patent is an exclusive right granted to its owner to manufacture and sell a patented device or to use a process for 20 years.

Capital expenditures:

The carrying amount of an asset when using double-declining-balance depreciation is always greater than the carrying amount from using straight-line depreciation, except at the beginning and the end of the asset's useful life, when it is the same.

Revising an estimate of the useful life or residual value of an item of property, plant and equipment is referred to as a change in accounting estimate, and is reflected in the past, current, and future financial statements.

A company purchased property for a building site. The costs associated with the property were: What portion of these costs should be allocated to the cost of the land and what portion should be allocated to the cost of the new building?

A company purchased a cash register on January 1 for $5,400. This register has a useful life of 10 years and a residual value of $400. What would be the depreciation expense for the second year of its useful life using the double-declining-balance method?

Revenue expenditures:

A company had average total assets of $897,000. Its gross sales were $1,090,000 and its net sales were $1,000,000. The company's total asset turnover equals:

Describe the accounting for intangible assets, including their acquisition, cost allocation, and accounts involved.

Prepare journal entries to record the following transactions of a company during the current year:

The double-declining balance method is applied by (1) computing the asset's straight-line depreciation rate, (2) doubling it, (3) subtracting residual value from cost, and (4) multiplying the rate times the net value.

A company purchased a delivery van for $23,000 with a residual value of $3,000 on September 1, Year 1. It has an estimated useful life of 5 years. Using the straight-line method, how much depreciation expense should the company recognize on December 31, Year 1?

A company purchased property for $100,000. The property included a building, a parking lot, and land. The building was appraised at $62,000; the land at $45,000, and the parking lot at $18,000. Land should be recorded in the accounting records with an allocated cost of:

A patent:

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Cost Accounting

Process Cost Accounting

Cost Allocation and Performance Measurement

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Capital Budgeting and Managerial Decisions

Filters