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Exam 10: Plant Assets,natural Resources,and Intangibles

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Question 41

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Which of the following depreciation methods allocate a varying amount of depreciation to expense each year based on an asset's usage?

A) the straight-line method
B) the annuity method
C) the units-of-production method
D) the double-declining-balance method

E) A) and C)
F) A) and B)

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Question 42

True/False

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A business that has a vacant building that is not currently being used would classify the building as a plant asset.

A) True
B) False

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Question 43

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According to Generally Accepted Accounting Principles,goodwill must be amortized.

Which of the following is an intangible asset?

Regarding impairment of intangible assets,which of the following statements is incorrect?

On October 1,2018,Northern Company purchased a patent for $211,000 cash.Although the patent gives legal protection for 20 years,the patent is expected to be used for only 10 years.The patent has no residual value.What will be the balance in the patent account on September 30,2019?

Carpenters Company,a manufacturing company,acquired equipment on January 1,2017 for $510,000.Estimated useful life of the equipment was seven years and the estimated residual value was $12,000.On January 1,2020,after using the equipment for three years,the total estimated useful life has been revised to nine total years.Residual value remains unchanged.The company uses the straight-line method of depreciation.Calculate depreciation expense for 2020.(Round any intermediate calculations to two decimal places,and your final answer to the nearest dollar.)

Companies are required to report plant assets as a single amount,with a note to the financial statements that provides detailed information.

Goodwill is only recorded by an acquiring company when it purchases another company and pays more for that company than the market value of its net assets.

The useful life of a plant asset is the length of the service period expected from the asset.

Which of the following is an expense that results from the usage of a natural resource?

The double-declining-balance method is an accelerated method of depreciation.

Danube Company purchased a used machine for $12,000.The machine required installation costs of $3000 and insurance while in transit of $1500.At which of the following amounts would the machine be recorded?

On October 1,2018,Mobile Company purchased a patent for $100,000 cash.Although the patent gives legal protection for 20 years,it is expected to be used for only eight years.The patent has no residual value.Journalize the amortization expense for 2018.Assume straight-line amortization.Omit explanation.

Franchises are privileges granted by a business to sell goods and services under specified conditions.

On January 1,2018,Dalton 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 company used the machine for 3,600 hours in 2018 and 5,000 hours in 2019.Calculate depreciation expense for 2019 if the company uses the units-of-production method of depreciation.

Laramie Company has acquired a property that included both land and a building for $500,000.The company hired an appraiser who has determined that the market value of the land is $300,000 and that of the building is $480,000.At what amount should the company record the cost of the building? (Round any intermediate calculations to two decimal places,and your final answer to the nearest dollar.)

Which of the following statements,regarding the reporting of intangible assets,is correct?

Long Island Company discards a truck that was originally purchased for $50,000 and had accumulated depreciation of $30,000.Prepare the journal entry for the disposal.Omit explanation.

Dodgers Company's beginning and ending total assets in the year 2019 were $19,700,000 and $22,300,000,respectively.Its asset turnover ratio for the year was calculated to be 1.9 times.Calculate the amount of net sales for the year 2019.