Question 1

If an asset costs $35,000,has a residual value of $3,000,and has a useful life of five years,the entry to record depreciation in the second year,using the double-declining-balance method,is:

Accepted Answer

A)    Depreciation Expense - Asset 8,050 Cash 8,050\begin{array} { l } 	ext { Depreciation Expense - Asset } &8,050 \\quad 	ext { Cash }&&8,050\end{array} Depreciation Expense - Asset  Cash ​8,050​8,050​ 
B)     Depreciation Expense - Asset 8,400Accumulated Depreciation - Asset 8,400\begin{array}{llr}  	ext { Depreciation Expense - Asset  } &8,400\ 	ext {Accumulated Depreciation - Asset  } &&8,400\\end{array} Depreciation Expense - Asset Accumulated Depreciation - Asset ​8,400​8,400​ 
C)     Depreciation Expense - Asset 8,750 Accumulated Depreciation - Asset 8,750\begin{array}{llr}  	ext { Depreciation Expense - Asset  } &8,750\ 	ext { Accumulated Depreciation - Asset } &&8,750\\end{array} Depreciation Expense - Asset  Accumulated Depreciation - Asset ​8,750​8,750​ 
D)     Accumulated Depreciation - Asset 9,100Depreciation Expense - Asset 9,100\begin{array}{llr}  	ext { Accumulated Depreciation - Asset  } &9,100 \ 	ext {Depreciation Expense - Asset  } &&9,100\\end{array} Accumulated Depreciation - Asset Depreciation Expense - Asset ​9,100​9,100​

Question 2

In general,a cost incurred in conjunction with a long-term asset is included in the long-term asset account when the cost

Accepted Answer

A)   is incurred subsequent to asset use.
B)   exceeds a certain dollar amount.
C)   is incurred prior to asset use.
D)   will expire in less than one year.

Question 3

Residual value is not relevant when calculating double-declining-balance depreciation.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following statements is true about successful efforts accounting?

Accepted Answer

A)   It is a depreciation method
B)   All costs are recorded as assets and then depleted over the resource's useful life.
C)   The cost of a dry well would be written off immediately as a loss.
D)   The cost of successful exploration is recorded as an asset and is not written off.

Question 5

The exclusive right to use an identifying symbol is called a patent.

Accepted Answer

A) True 
 B)False

Question 6

An asset was purchased for $200,000.It had an estimated residual value of $40,000 and an estimated useful life of ten years.After four years of use,the estimated residual value is revised to $28,000.Assuming straight-line depreciation,depreciation expense in year 5 of use would be

Accepted Answer

A)   $18,000.
B)   $17,144.
C)   $28,668.
D)   $15,333.

Question 7

The unexpired cost of a plant asset is referred to as its

Accepted Answer

A)   depreciable cost.
B)   carrying value.
C)   accumulated depreciation.
D)   original cost.

Question 8

A copyright is obtained for what becomes a very successful book.The publisher expects the book to generate sales for ten years.The copyright should be

Accepted Answer

A)   amortized over the author's life plus 70 years.
B)   expensed immediately.
C)   amortized over 10 years.
D)   amortized over a reasonable life.

Question 9

Starsky Manufacturing Company purchased three machines during the year:
 $$\begin{array} { l l r } 
\text { Feb. 10 } & \text { Machine 1 } &\$ 1,800 \
\text { July 26 } & \text { Machine 2 } & 12,000 \
\text { Oct. 11 } & \text { Machine 3 } & 21,600
\end{array}$$ 
Each machine is expected to last six years and have no residual value.The company's fiscal year corresponds to the calendar year.Using the straight-line method,compute the depreciation charge for each machine for the year.Round amounts to the nearest dollar.

Accepted Answer

Machine 1: $1,800

1/6

11/12 ...

Question 10

Gain on Sale of Machinery is recorded as a debit.

Accepted Answer

A) True 
 B)False

Question 11

An older term for long-term assets is fixed assets.

Accepted Answer

A) True 
 B)False

Question 12

In the calculation of free cash flow,dividends and sales of plant assets are both deducted.

Accepted Answer

A) True 
 B)False

Question 13

Above-average earnings is often the basis for the calculation of goodwill.

Accepted Answer

A) True 
 B)False

Question 14

Under what circumstances will a loss be recorded on the sale of equipment,and what effect will the loss have on stockholders' equity?

Accepted Answer

A loss will be recorded when the proceed...

Question 15

Book value refers to the market value of a long-term asset.

Accepted Answer

A) True 
 B)False

Question 16

The entry to record the sale of equipment costing $40,000,with accumulated depreciation of $34,000 and sale price of $8,800,is:

Accepted Answer

A)     Cash 8,800 Accumulated Depreciation- Equipment 34,000 Equipment 40,000 Gain on Sale of Equipment 2,800\begin{array} { l c c } 	ext { Cash } & 8,800 \	ext { Accumulated Depreciation- Equipment } & 34,000 & \\quad 	ext { Equipment } & & 40,000 \	ext { Gain on Sale of Equipment } && 2,800\end{array} Cash  Accumulated Depreciation- Equipment  Equipment  Gain on Sale of Equipment ​8,80034,000​40,0002,800​ 
B)     Accumulated Depreciation- Equipment 34,000 Equipment 25,200 Gain on Sale of Equipment 8,800\begin{array} { l c } 	ext { Accumulated Depreciation- Equipment } & 34,000 \	ext { Equipment } & &25,200 \	ext { Gain on Sale of Equipment } & &8,800\end{array} Accumulated Depreciation- Equipment  Equipment  Gain on Sale of Equipment ​34,000​25,2008,800​ 
C)     Accumulated Depreciation- Equipment 8,800 Loss on Sale of Equipment 31,200 Equipment 40,000\begin{array}{lr}	ext { Accumulated Depreciation- Equipment } & 8,800 \	ext { Loss on Sale of Equipment } & 31,200 \	ext { Equipment } &&40,000\end{array} Accumulated Depreciation- Equipment  Loss on Sale of Equipment  Equipment ​8,80031,200​40,000​ 
D)     Accumulated Depreciation- Equipment 14,800 Loss on Sale of Equipment 25,200 Equipment 40,000\begin{array}{lr}	ext { Accumulated Depreciation- Equipment } & 14,800 \	ext { Loss on Sale of Equipment } & 25,200 \	ext { Equipment } &&40,000\end{array} Accumulated Depreciation- Equipment  Loss on Sale of Equipment  Equipment ​14,80025,200​40,000​

Question 17

A truck that cost $20,000 and on which $8,000 of depreciation had been recorded was disposed of for $11,600.Indicate whether a gain or loss should be recorded,and for what amount.

Accepted Answer

$400 loss ...

Question 18

Land and a building on the land are purchased for $336,000.The appraised values of the land and building are $60,000 and $300,000,respectively.The cost allocated to the building should be

Accepted Answer

A)   $28,000.
B)   $122,000.
C)   $150,000.
D)   $280,000.

Question 19

In 20xx,Minneapolis Mining purchased a mineral deposit for $12,000,000.It is estimated that 15,000,000 tons can be extracted from the mine.Calculate depletion expense during 20xx when 700,000 tons were extracted and sold.

Accepted Answer

$560,000 ($12,000,00...

Question 20

Federal tax law allows the rapid write-off of plant assets.

Accepted Answer

A) True 
 B)False

Exam 9: Long Term Assets

A truck that cost $20,000 and on which $8,000 of depreciation had been recorded was disposed of for $11,600.Indicate whether a gain or loss should be recorded,and for what amount.

Correct Answer
verified
$400 loss ...
View Answer

An older term for long-term assets is fixed assets.

Correct Answer
verified

Correct Answer
verified
Machine 1: $1,800 1/6 11/12 ...
View Answer

The exclusive right to use an identifying symbol is called a patent.

Correct Answer
verified

In general,a cost incurred in conjunction with a long-term asset is included in the long-term asset account when the cost

Correct Answer
verified

If an asset costs $35,000,has a residual value of $3,000,and has a useful life of five years,the entry to record depreciation in the second year,using the double-declining-balance method,is:

Correct Answer
verified

In the calculation of free cash flow,dividends and sales of plant assets are both deducted.

Correct Answer
verified

In 20xx,Minneapolis Mining purchased a mineral deposit for $12,000,000.It is estimated that 15,000,000 tons can be extracted from the mine.Calculate depletion expense during 20xx when 700,000 tons were extracted and sold.

Correct Answer
verified
$560,000 ($12,000,00...
View Answer

Residual value is not relevant when calculating double-declining-balance depreciation.

Correct Answer
verified

Federal tax law allows the rapid write-off of plant assets.

Correct Answer
verified

Land and a building on the land are purchased for $336,000.The appraised values of the land and building are $60,000 and $300,000,respectively.The cost allocated to the building should be

Correct Answer
verified

A copyright is obtained for what becomes a very successful book.The publisher expects the book to generate sales for ten years.The copyright should be

Correct Answer
verified

Which of the following statements is true about successful efforts accounting?

Correct Answer
verified

Under what circumstances will a loss be recorded on the sale of equipment,and what effect will the loss have on stockholders' equity?

Correct Answer
verified
A loss will be recorded when the proceed...
View Answer

Book value refers to the market value of a long-term asset.

Correct Answer
verified

Above-average earnings is often the basis for the calculation of goodwill.

Correct Answer
verified

The entry to record the sale of equipment costing $40,000,with accumulated depreciation of $34,000 and sale price of $8,800,is:

Correct Answer
verified

An asset was purchased for $200,000.It had an estimated residual value of $40,000 and an estimated useful life of ten years.After four years of use,the estimated residual value is revised to $28,000.Assuming straight-line depreciation,depreciation expense in year 5 of use would be

Correct Answer
verified

The unexpired cost of a plant asset is referred to as its

Correct Answer
verified

Gain on Sale of Machinery is recorded as a debit.

Correct Answer
verified

Exam 9: Long Term Assets

A truck that cost $20,000 and on which $8,000 of depreciation had been recorded was disposed of for $11,600.Indicate whether a gain or loss should be recorded,and for what amount.

Correct Answerverified$400 loss ...View AnswerShow Answer

An older term for long-term assets is fixed assets.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedMachine 1: $1,800 1/6 11/12 ...View AnswerShow Answer

The exclusive right to use an identifying symbol is called a patent.

Correct AnswerverifiedShow Answer

In general,a cost incurred in conjunction with a long-term asset is included in the long-term asset account when the cost

Correct AnswerverifiedShow Answer

If an asset costs $35,000,has a residual value of $3,000,and has a useful life of five years,the entry to record depreciation in the second year,using the double-declining-balance method,is:

Correct AnswerverifiedShow Answer

In the calculation of free cash flow,dividends and sales of plant assets are both deducted.

Correct AnswerverifiedShow Answer

In 20xx,Minneapolis Mining purchased a mineral deposit for $12,000,000.It is estimated that 15,000,000 tons can be extracted from the mine.Calculate depletion expense during 20xx when 700,000 tons were extracted and sold.

Correct Answerverified$560,000 ($12,000,00...View AnswerShow Answer

Residual value is not relevant when calculating double-declining-balance depreciation.

Correct AnswerverifiedShow Answer

Federal tax law allows the rapid write-off of plant assets.

Correct AnswerverifiedShow Answer

Land and a building on the land are purchased for $336,000.The appraised values of the land and building are $60,000 and $300,000,respectively.The cost allocated to the building should be

Correct AnswerverifiedShow Answer

A copyright is obtained for what becomes a very successful book.The publisher expects the book to generate sales for ten years.The copyright should be

Correct AnswerverifiedShow Answer

Which of the following statements is true about successful efforts accounting?

Correct AnswerverifiedShow Answer

Under what circumstances will a loss be recorded on the sale of equipment,and what effect will the loss have on stockholders' equity?

Correct AnswerverifiedA loss will be recorded when the proceed...View AnswerShow Answer

Book value refers to the market value of a long-term asset.

Correct AnswerverifiedShow Answer

Above-average earnings is often the basis for the calculation of goodwill.

Correct AnswerverifiedShow Answer

The entry to record the sale of equipment costing $40,000,with accumulated depreciation of $34,000 and sale price of $8,800,is:

Correct AnswerverifiedShow Answer

An asset was purchased for $200,000.It had an estimated residual value of $40,000 and an estimated useful life of ten years.After four years of use,the estimated residual value is revised to $28,000.Assuming straight-line depreciation,depreciation expense in year 5 of use would be

Correct AnswerverifiedShow Answer

The unexpired cost of a plant asset is referred to as its

Correct AnswerverifiedShow Answer

Gain on Sale of Machinery is recorded as a debit.

Correct AnswerverifiedShow Answer

Correct Answer
verified
$400 loss ...
View Answer

Correct Answer
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Correct Answer
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Machine 1: $1,800 1/6 11/12 ...
View Answer

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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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$560,000 ($12,000,00...
View Answer

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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified
A loss will be recorded when the proceed...
View Answer

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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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