Question 1

Lomax Enterprises purchased a depreciable asset for $22,000 on March 1,Year 1.The asset will be depreciated using the straight-line method over its four-year useful life.Assuming the asset's salvage value is $2,000,Lomax Enterprises should recognize depreciation expense in Year 2 in the amount of:

Accepted Answer

A)  $19,166.67
B)  $5,000.00
C)  $5,500.00
D)  $20,000.00
E)  $4,166.67F) None of the above
G) A) and E)

Question 2

A plant asset's useful life might not be the same as its productive life.

Accepted Answer

A) True 
 B)False

Question 3

If land is purchased as a building site,the cost of removing existing structures is not charged to the Land account.

Accepted Answer

A) True 
 B)False

Question 4

Amortization:

Accepted Answer

A)  Is the systematic allocation of the cost of an intangible asset to expense over its estimated useful life.
B)  Is the process of allocating to expense the cost of a plant asset to the accounting periods benefiting from its use.
C)  Is the process of allocating the cost of natural resources to periods when they are consumed.
D)  Is an accelerated form of expensing an asset's cost.
E)  Is also called depletion.F) B) and C)
G) All of the above

Question 5

Marble Company purchased a machine costing $120,000,terms 1/10,n/30.The machine was shipped FOB shipping point and freight charges were $2,000.The machine requires special mounting and wiring connections costing $10,000.When installing the machine,$1,300 in damages occurred.Materials costing $1,500 are used in testing and adjusting the machine to produce a satisfactory product.Compute the cost recorded for this machine assuming Marble paid within the discount period.

Accepted Answer

A)  $131,100.
B)  $134,800.
C)  $132,300.
D)  $133,600.
E)  $130,300.F) None of the above
G) A) and C)

Question 6

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.F) C) and D)
G) All of the above

Question 7

When an asset is purchased (or disposed of)at a time other than the beginning or the end of an accounting period,depreciation is recorded for part of a year so that the year of purchase or the year of disposal is charged with its share of the asset's depreciation.

Accepted Answer

A) True 
 B)False

Question 8

Extraordinary repairs are expenditures extending the asset's useful life beyond its original estimate,and are capital expenditures because they benefit future periods.

Accepted Answer

A) True 
 B)False

Question 9

A leasehold refers to the rights the lessor grants to the lessee under the terms of the lease.

Accepted Answer

A) True 
 B)False

Question 10

Match each of the following terms with the appropriate definitions.

-Assets that increase the benefits of land, have a limited useful life, and are subject to depreciation.

Accepted Answer

A)  Obsolescence
B)  Amortization
C)  Depletion
D)  Salvage value
E)  Book valueF) Land improvementsG) CopyrightH) InadequacyI) PatentJ) D) and H)
K) B) and F)

Question 11

What are some of the variables that make a plant asset's useful life difficult to predict?

Accepted Answer

There are several factors that make it d...

Question 12

A method that charges the same amount of expense to each period of the asset's useful life is called:

Accepted Answer

A)  Accelerated depreciation.
B)  Declining-balance depreciation.
C)  Straight-line depreciation.
D)  Units-of-production depreciation.
E)  Modified accelerated cost recovery system (MACRS)  depreciation.F) A) and B)
G) A) and C)

Question 13

Intangible assets are nonphysical assets used in operations that confer on their owners' long-term rights,privileges,or competitive advantages.

Accepted Answer

A) True 
 B)False

Question 14

Plant assets refer to intangible assets that are used in the operations of a business.

Accepted Answer

A) True 
 B)False

Question 15

Carmel Company acquires a mineral deposit at a cost of $5,900,000.It incurs additional costs of $600,000 to access the deposit,which is estimated to contain 2,000,000 tons and is expected to take 5 years to extract.What journal entry would be needed to record the expense for the first year assuming 418,000 tons were mined?

Accepted Answer

A)  Debit Depletion Expense $1,233,100; credit Accumulated Depletion $1,233,100.
B)  Debit Amortization Expense $1,358,500; credit Accumulated Amortization $1,358,500.
C)  Debit Depreciation Expense $1,358,500; credit Accumulated Depreciation $1,358,500.
D)  Debit Depletion Expense $1,358,500; credit Accumulated Depletion $1,358,500.
E)  Debit Depreciation Expense $1,233,100; credit Accumulated Depreciation $1,233,100.F) B) and D)
G) All of the above

Question 16

_____________________ depreciation uses a depreciation rate that is a multiple of the straight-line rate and applies it to an asset's beginning-of-period book value.

Accepted Answer

The answer of _____________________ depreciation uses a depreciation rate that...

Question 17

A copyright:

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 20 years.F) D) and E)
G) C) and D)

Question 18

On September 30 of the current year,a company acquired and placed in service a machine at a cost of $700,000.It has been estimated that the machine has a service life of five years and a salvage value of $40,000.Using the double-declining-balance method of depreciation,prepare a schedule showing depreciation amounts for the current year and the next 4 years (round answers to the nearest dollar).The company closes its books on December 31 of each year.

Accepted Answer

*for 3 months.
**fo...

Question 19

Match between columns
                        Premises: A change in a financial statement amount that results from new information,subsequent developments,better insight,or improved judgment.
The process of allocating the cost of natural resources to periods when they are consumed.
A depreciation method that charges a varying amount to expense for each period of an asset's useful life depending on its usage.
An expenditure reported on the current income statement as an expense because it does not provide a material benefit in future periods.
A measure of a company's ability to use its assets to generate sales.
An expenditure to make a plant asset more efficient or productive.
The amount by which the company's value exceeds the value of its individual assets and liabilities.
Certain nonphysical assets used in operations that confer on their owners long-term rights,privileges,or competitive advantages.
A method that yields larger depreciation expense during the early years of an asset's life and smaller expense in the later years.
Expenditures made to keep a plant asset in normal,good operating condition.

Accepted Answer

The Answer of Goodwill and Units-of production method and Betterment is...

Question 20

Land improvements are:

Accepted Answer

A)  Assets that increase the usefulness of land, and like land, are not depreciated.
B)  Assets that increase the usefulness of land, but that have a limited useful life and are subject to depreciation.
C)  Included in the cost of the land account.
D)  Expensed in the period incurred.
E)  Also called basket purchases.F) A) and D)
G) B) and C)

Exam 10: Plant Assets, natural Resources, and Intangibles

A leasehold refers to the rights the lessor grants to the lessee under the terms of the lease.

Correct Answer
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Amortization:

Correct Answer
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Intangible assets are nonphysical assets used in operations that confer on their owners' long-term rights,privileges,or competitive advantages.

Correct Answer
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Land improvements are:

Correct Answer
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A plant asset's useful life might not be the same as its productive life.

Correct Answer
verified

Extraordinary repairs are expenditures extending the asset's useful life beyond its original estimate,and are capital expenditures because they benefit future periods.

Correct Answer
verified

What are some of the variables that make a plant asset's useful life difficult to predict?

Correct Answer
verified
There are several factors that make it d...
View Answer

Correct Answer
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A patent:

Correct Answer
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When an asset is purchased (or disposed of)at a time other than the beginning or the end of an accounting period,depreciation is recorded for part of a year so that the year of purchase or the year of disposal is charged with its share of the asset's depreciation.

Correct Answer
verified

_____________________ depreciation uses a depreciation rate that is a multiple of the straight-line rate and applies it to an asset's beginning-of-period book value.

Correct Answer
verified

Match each of the following terms with the appropriate definitions. -Assets that increase the benefits of land, have a limited useful life, and are subject to depreciation.

Correct Answer
verified

Plant assets refer to intangible assets that are used in the operations of a business.

Correct Answer
verified

A method that charges the same amount of expense to each period of the asset's useful life is called:

Correct Answer
verified

If land is purchased as a building site,the cost of removing existing structures is not charged to the Land account.

Correct Answer
verified

A copyright:

Correct Answer
verified

Correct Answer
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*for 3 months.
**fo...
View Answer

Correct Answer
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Match each of the following terms with the appropriate definitions.

Lomax Enterprises purchased a depreciable asset for $22,000 on March 1,Year 1.The asset will be depreciated using the straight-line method over its four-year useful life.Assuming the asset's salvage value is $2,000,Lomax Enterprises should recognize depreciation expense in Year 2 in the amount of:

Correct Answer
verified

Exam 10: Plant Assets, natural Resources, and Intangibles

A leasehold refers to the rights the lessor grants to the lessee under the terms of the lease.

Correct AnswerverifiedShow Answer

Amortization:

Correct AnswerverifiedShow Answer

Intangible assets are nonphysical assets used in operations that confer on their owners' long-term rights,privileges,or competitive advantages.

Correct AnswerverifiedShow Answer

Land improvements are:

Correct AnswerverifiedShow Answer

A plant asset's useful life might not be the same as its productive life.

Correct AnswerverifiedShow Answer

Extraordinary repairs are expenditures extending the asset's useful life beyond its original estimate,and are capital expenditures because they benefit future periods.

Correct AnswerverifiedShow Answer

What are some of the variables that make a plant asset's useful life difficult to predict?

Correct AnswerverifiedThere are several factors that make it d...View AnswerShow Answer

Correct AnswerverifiedShow Answer

A patent:

Correct AnswerverifiedShow Answer

When an asset is purchased (or disposed of)at a time other than the beginning or the end of an accounting period,depreciation is recorded for part of a year so that the year of purchase or the year of disposal is charged with its share of the asset's depreciation.

Correct AnswerverifiedShow Answer

_____________________ depreciation uses a depreciation rate that is a multiple of the straight-line rate and applies it to an asset's beginning-of-period book value.

Correct AnswerverifiedShow Answer

Match each of the following terms with the appropriate definitions. -Assets that increase the benefits of land, have a limited useful life, and are subject to depreciation.

Correct AnswerverifiedShow Answer

Plant assets refer to intangible assets that are used in the operations of a business.

Correct AnswerverifiedShow Answer

A method that charges the same amount of expense to each period of the asset's useful life is called:

Correct AnswerverifiedShow Answer

If land is purchased as a building site,the cost of removing existing structures is not charged to the Land account.

Correct AnswerverifiedShow Answer

A copyright:

Correct AnswerverifiedShow Answer

Correct Answerverified *for 3 months.**fo...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Match each of the following terms with the appropriate definitions.

Lomax Enterprises purchased a depreciable asset for $22,000 on March 1,Year 1.The asset will be depreciated using the straight-line method over its four-year useful life.Assuming the asset's salvage value is $2,000,Lomax Enterprises should recognize depreciation expense in Year 2 in the amount of:

Correct AnswerverifiedShow Answer

Correct Answer
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There are several factors that make it d...
View Answer

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*for 3 months.
**fo...
View Answer

Correct Answer
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Correct Answer
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