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Exam 10: Plant Assets,natural Resources,and Intangibles

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Question 81

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Anderson Company has purchased a group of assets for $23,800.The assets and their relative market values are listed below. $\begin{array} { | l | r | } \hline \text { Land } & \$ 7200 \\\hline \text { Equipment } & 2100 \\\hline \text { Building } & 3300 \\\hline\end{array}$ Which of the following amounts would be debited to the Land account? (Round any intermediate calculations to two decimal places,and your final answer to the nearest dollar.)

A) $4200
B) $13,566
C) $4046
D) $6188

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Question 82

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Plant assets remain on the business's books until they are disposed of.

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Question 83

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If a plant asset is sold for more than its book value,a loss is recorded.

The book value of a plant asset is reported on the balance sheet as the cost of the asset minus accumulated depreciation.

On January 1,2017 Hilldale Company had total assets of $365,000.During the year,the company purchased new machinery worth $83,000 and promised to pay the amount due after two years.Throughout the year,it earned revenue of $60,000 every month.Calculate the asset turnover ratio.

The asset turnover ratio measures the amount of net sales generated for each average dollar of total assets invested.

The expected value of an asset at the end of its useful life is known as ________.

If a business changes the estimated useful life,or estimated residual value,of a plant asset,depreciation expense must be recalculated.

Under U.S.GAAP,plant assets are reported at book value on the balance sheet.

A fully depreciated plant asset that is still in service is not reported as an asset on the balance sheet.

An asset was purchased for $33,000 on January 1,2019.The asset's estimated useful life was five years,and its residual value was $4000.The straight-line method of depreciation was used.Calculate the gain or loss if the asset is sold for $26,000 on December 31,2019,the last day of the accounting period.

The cost of a plant asset includes all amounts paid to ready the asset for its intended use.

If a company expenses an extraordinary repair,net income would be understated and the asset would be understated.

A business,which has a calendar year accounting period,purchased an asset on March 1,2018.The business disposed of the asset on August 31,2019.For the calendar year 2019,depreciation should be calculated from January 1 to August 31.

Masonry Construction Group paid $12,000 for a plant asset that had a market value of $14,500.At which of the following amounts should the plant asset be recorded?

On January 1,2019,a company acquired a truck for $600,000.The residual value was estimated to be $20,000.The truck can be driven for 50,000 miles over the next three years.The actual usage of the truck was 8,640 miles for the first year.Calculate the rate of depreciation to be applied and depreciation for the first year using the units-of-production method.(Do not round your intermediate calculations.)

According to Generally Accepted Accounting Principles,if the fair value of goodwill decreases below its book value,an impairment loss must be recorded.

On January 1,2019,Sapphire Manufacturing Company purchased a machine for $40,000,000.The company expects to use the machine for 24,000 hours over the next six years.The estimated residual value of the machine at the end of the sixth year is $40,000.The schedule of usage of the machine is below. $\begin{array} { | r | c | } \hline \text { Year } & \text { Usage } \\\hline 1 & 4,500 \\\hline 2 & 6,000 \\\hline 3 & 5,200 \\\hline 4 & 4,300 \\\hline 5 & 2,000 \\\hline 6 & 2,000 \\\hline\end{array}$ Prepare the depreciation schedule using the units-of-production method of depreciation.

Motor Sales sold its old office furniture for $6000.The original cost was $16,000,and at the time of sale,accumulated depreciation was $14,000.What is the effect of this transaction?

Residual value is also known as depreciable cost.