FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 10: Plant Assets Natural Resoures and Intangibles

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 91

Multiple Choice

Review LaterAdd Note

Review Later

A company purchased a weaving machine for $190,000. The machine has a useful life of 8 years and a residual value of $10,000. It is estimated that the machine could produce 75,000 bolts of woven fabric over its useful life. In the first year, 15,000 bolts were produced. In the second year, production increased to 19,000 units. -Using the units-of-production method, what is the book value of the machine at the end of the second year?

A) $81,600.
B) $190,000.
C) $180,000.
D) $144,400.
E) $108,400.

F) D) and E)
G) A) and C)

Correct Answer

verified

Show Answer

Question 92

True/False

Review LaterAdd Note

Review Later

Revenue expenditures, also called income statement expenditures, are additional costs of plant assets that do not materially increase the assets' life or productive capabilities.

A) True
B) False

Correct Answer

verified

Show Answer

Question 93

Multiple Choice

Review LaterAdd Note

Wickland Company installs a manufacturing machine in its production facility 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 salvage 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.

Natural resources may be reported under either plant assets or their own separate category on the balance sheet.

The depreciation method that charges a varying amount to expense for each period of an asset's useful life depending on its usage is ________.

Hunter Sailing Company exchanged an old sailboat for a new one. The old sailboat had a cost of $160,000 and accumulated depreciation of $100,000. The new sailboat had an invoice price of $270,000. Hunter received a trade in allowance of $70,000 on the old sailboat, which meant the company paid $200,000 in addition to the old sailboat to acquire the new sailboat. If this transaction has commercial substance, what amount of gain or loss should be recorded on this exchange?

What is depreciation of plant assets? What are the factors necessary in computing depreciation?

Riverboat Adventures pays $310,000 plus $15,000 in closing costs to buy out a competitor. The real estate consists of land appraised at $35,000, a building appraised at $105,000, and paddleboats appraised at $210,000. -Compute the cost that should be allocated to the building.

A trademark is an exclusive right granted to its owner to publish and sell a musical, literary, or artistic work during the life of the creator plus 70 years.

Marks Consulting purchased equipment costing $45,000 on January 1, Year 1. The equipment is estimated to have a salvage value of $5,000 and an estimated useful life of 8 years. Straight-line depreciation is used. If the equipment is sold on July 1, Year 5 for $20,000, the journal entry to record the sale will include a:

Intangible assets do not include:

A company's property records revealed the following information about its plant assets: $\begin{array} { | l | r | r | l | l | l | } \hline \begin{array} { l } \text { Machine } \\\text { No. }\end{array} & { \text { Cost } } & \begin{array} { l } \text { Salvage } \\\text { Value }\end{array} & \begin{array} { l } \text { Purchase } \\\text { Date }\end{array} & \begin{array} { l } \text { Estimated } \\\text { Life }\end{array} & \text { Depreciation Method } \\\hline 1 & \$ 42,000 & \$ 3,000 & 101 & 3 \text { years } & \text { Straight-line } \\\hline 2 & 86,000 & 8 , 6 0 0 & 7 / 01 & 5 \text { years } & \text { Double-declining balanes } \\\hline\end{array}$ Calculate the depreciation expense for each machine in Year 1 and Year 2 for the year ended December 31. Machine 1: Year 1______________________ Year 2 _______________________ Machine 2: Year 1 ______________________ Year 2 _______________________

A benefit of using an accelerated depreciation method is that:

In year one, McClintock Co. acquired a truck that cost $75,500 with an estimated $14,000 salvage value and 4 year estimated useful life. Depreciation in the first year was $15,375. McClintock had the following transactions involving plant assets during Year 2. Unless otherwise indicated, all transactions were for cash. Jan. 5 Paid $5,000 to put a new engine in the truck that is expected to make the truck run more efficiently and increase the truck's useful life by one year. The salvage value did not change. Mar. 1 Paid $2,000 to replace a broken tailgate that was damaged when a heavy carton was inadvertently dropped on it. Dec. 31 Recorded straight-line depreciation on the truck. Prepare the general journal entries to record these transactions.

The insufficient capacity of a company's plant asset to meet the company's productive demands is called ________.

An asset can be disposed of by all of the following except:

Martin Company purchases a machine at the beginning of the year at a cost of $60,000. The machine is depreciated using the double-declining-balance method. The machine's useful life is estimated to be 4 years with a $5,000 salvage value. -Depreciation expense in year 4 is:

Which of the following would be classified as a natural resource?

Bering Rock acquires a granite quarry at a cost of $590,000, which is estimated to contain 200,000 tons of granite and is expected to take 6 years to remove. -Compute the depletion expense for the first year assuming 38,000 tons were removed and sold.

A company purchased land on which to construct a new building for a cost of $350,000. Additional costs incurred were: $\begin{array}{lr}\text { Real estate broker's commissions } & \$ 24,500 \\\text { Legal fees incurred in purchase of the real estate } & 1,500 \\\text { Landscaping } & 8,000 \\\text { Cost to remove old house located on land } & 3,000 \\\text { Proceeds from selling materials salvaged from old house } & 1,000\end{array}$ What total dollar amount should be charged to Land and what amount should be charged to Building or other accounts?