FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 8: Accounting for Long-Term Operational Assets

Show Answer

Share

---

All types

Filters

Study Flashcards

Question 1

Short Answer

Review LaterAdd Note

Review Later

Indicate whether each of the following statements is true or false. _____ a)Long-term assets having no physical substance are called intangible assets. _____ b)Trademarks are examples of an intangible asset. _____ c)Natural resources are examples of tangible long-term assets. _____ d)The reason that land is classified separately from other tangible assets is because the cost is normally much higher. _____ e)Goodwill is classified as Plant,Property and Equipment.

Correct Answer

verified

a)True b)T...

View Answer

Show Answer

Question 2

Essay

Review LaterAdd Note

Review Later

Mays Corporation purchased a new truck on January 1,2016 for $65,000 cash.Mays estimated salvage value of $10,000 at the end of the useful life of 5 years.On January 1,2018 Mays had to replace the engine of the truck paying $4,000 cash.Due to the replaced engine,Mays estimates that the truck will continue a productive life for another four years. Required: a)Prepare the journal entry to record the cost of the new engine. b)Assuming straight-line depreciation is used,calculate the depreciation expense for 2018.

Correct Answer

verified

Show Answer

Question 3

Multiple Choice

Review LaterAdd Note

On April 1,2016,Fossil Energy Company purchased an oil producing well at a cash cost of $12,000,000.It is estimated that the oil well contains 600,000 barrels of oil,of which only 500,000 can be profitably extracted.By December 31,2016,25,000 barrels of oil were produced and sold.The amount of depletion expense for 2016 on this well would be:

Which of the following intangible assets does not convey a specific legal right or privilege?

Which of the following industries would most likely have the highest value for the ratio of sales to property,plant,and equipment?

Explain how a choice of depreciation methods will have an impact on financial performance measures.Give one example.

Which of the following would be classified as a long-term operational asset?

A machine with a book value of $38,000 is sold for $32,000.Which of the following answers would accurately represent the effects of the sale on the financial statements?

Use the following to answer questions On January 1,2016,the Vanguard Company purchased a copyright for $12,000.Vanguard estimated the remaining useful life of the copyright to be 6 years. -Which of the following correctly shows the effect of Vanguard's purchase of the copyright on the financial statements?

On January 1,2016 Boothe Company paid $12,000 cash to extend the useful life of a machine.Which of the following general journal entries would be required to recognize this expenditure?

The purchase of a new delivery truck for cash is an asset use transaction.

Which of the following measurements would not be affected by the choice of depreciation methods?

Use the following to answer questions Jing Company was started on January 1,2016 when it issued common stock for $50,000 cash.Also,on January 1,2016 the company purchased office equipment that cost $34,000 cash.The equipment was delivered under terms FOB shipping point,and transportation cost was $2,000.The equipment had a five-year useful life and a $12,000 expected salvage value. -At the end of 2020,assuming the equipment had not been sold,the book value of the office equipment using straight-line depreciation and double-declining balance depreciation,respectively,would be:

For 2016,The Oscar Company records depreciation expense of $12,000 on its income statement and $9,000 of MACRS depreciation on its tax return.Which of the following answers is correct regarding the difference between the two figures?

At the end of the current accounting period,Ringgold Co.recorded depreciation of $15,000 on its equipment.The effect of this entry on the company's balance sheet is to:

Title search and document costs incurred to purchase a building are expensed in the period the building is acquired.

Indicate whether each of the following statements is true or false. _____ a)MACRS is an accelerated depreciation method commonly used for tax purposes. _____ b)The half-year convention is a semi-annual meeting of accountants and educators. _____ c)MACRS requires that the taxpayer estimate the salvage value of assets. _____ d)The use of MACRS provides tax benefits in the early years of an asset's life,compared to use of the straight-line method. _____ e)Most companies use the same depreciation method for both financial reporting and tax reporting.

In 2016,West Virginia Mining Co.purchased a coal mine that contained an estimated 1,200,000 tons of coal,of which 1,000,000 tons can be profitably extracted,for a cash price of $58,500,000.The company mined 50,000 tons of coal in 2016. Required: a)What is the amount of depletion to be recorded per ton of coal? b)What is the amount of depletion expense for 2016?

For what types of assets is the recognition of expense called "amortization?"

The Rupert Company purchased a delivery van on January 1,2016 for $45,000.Rupert uses straight-line depreciation for the asset,which has a five year estimated useful life and a salvage value estimated at $9,000.The asset was sold on January 1,2018 for $33,300 cash.Indicate whether each of the following items related to Rupert Company is true or false. _____ a)Annual depreciation for Rupert's equipment was $9,000. _____ b)Accumulated depreciation on January 1,2018 was $14,400. _____ c)Book value on January 1,2018 was $30,600. _____ d)On the date of the sale,Rupert will record a loss of $2,400. _____ e)A gain or loss on the sale of a plant asset is reported on the balance sheet.