FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 9: Plant Assets, Natural Resources and Intangible Assets

Show Answer

Share

---

All types

Filters

Study Flashcards

Question 91

Multiple Choice

Review LaterAdd Note

Review Later

Paneling the body of an open pickup truck would be classified as a(n)

A) revenue expenditure.
B) addition.
C) improvement.
D) ordinary repair.

E) None of the above
F) A) and D)

Correct Answer

verified

Show Answer

Question 92

Multiple Choice

Review LaterAdd Note

Review Later

The balance in the Accumulated Depreciation account represents the

A) cash fund to be used to replace plant assets.
B) amount to be deducted from the cost of the plant asset to arrive at its fair market value.
C) amount charged to expense in the current period.
D) amount charged to expense since the acquisition of the plant asset.

E) A) and C)
F) A) and D)

Correct Answer

verified

Show Answer

Question 93

True/False

Review LaterAdd Note

The fair value of a plant asset is always the same as its book value.

Grimwood Trucking purchased a tractor-trailer for $171,500.Grimwood uses the units-of-activity method for depreciating its trucks and expects to drive the truck 1,000,000 miles over its 12-year useful life.Salvage value is estimated to be $24,500.If the truck is driven 90,000 miles in its first year, how much depreciation expense should Grimwood record?

A gain or loss on disposal of a plant asset is determined by comparing the

If a plant asset is sold at a gain, the gain on disposal should reduce the cost of goods sold section of the income statement.

The cost of a new asset acquired in an exchange that has commercial substance is the cash paid plus the

To determine a new depreciation amount after a change in estimate of a plant asset's useful life, the asset's remaining depreciable cost is divided by its remaining useful life.

The book value of an asset will equal its fair market value at the date of sale if

Salvage value is not subtracted from plant asset cost in determining depreciation expense under the declining-balance method of depreciation.

The book value of a plant asset is the amount originally paid for the asset less anticipated salvage value.

When plant assets are exchanged, the cost of the new asset is the book value of the old asset plus any cash paid.

The entry to record depletion expense

The Accumulated Depreciation account represents a cash fund available to replace plant assets.

A factory machine was purchased for $375,000 on January 1, 2021.It was estimated that it would have a $75,000 salvage value at the end of its 5-year useful life.It was also estimated that the machine would be run 40,000 hours in the five years.The company ran the machine for 4,000 actual hours in 2021.If the company uses the units-of-activity method of depreciation, the amount of depreciation expense for 2021 would be

Ordinary repairs should be recognized when incurred as revenue expenditures.

The cost of a patent should be amortized over its legal life or useful life, whichever is shorter.

Gagner Clinic purchases land for $175,000 cash.The clinic assumes $1,500 in property taxes due on the land.The title and attorney fees totaled $1,000.The clinic has the land graded for $2,200.What amount does Gagner Clinic record as the cost for the land?

A computer company has $2,800,000 in research and development costs.Before accounting for these costs, the net income of the company is $2,000,000.What is the amount of net income or loss after these R & D costs are accounted for?

Rooney Company incurred $560,000 of research and development cost in its laboratory to develop a patent granted on January 1, 2021.On July 31, 2021, Rooney paid $84,000 for legal fees in a successful defense of the patent.The total amount debited to Patents through July 31, 2021, is