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Exam 9: Plant Assets, natural Resources, and Intangibles

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Question 81

Multiple Choice

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Roberts Construction Group paid $5,000 for a plant asset that had a market value of $7,500.At which of the following amounts should the plant asset be recorded?

A) $7,500
B) $2,500
C) $5,000
D) $10,000

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

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Question 82

Multiple Choice

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Which of the following is true when the estimate of an asset's useful life is changed?

A) The new estimate is ignored until the last year of the asset's life.
B) The depreciation expense in the prior year is restated.
C) Prior years' financial statements must be restated.
D) The asset's remaining depreciable book value will be spread over the asset's remaining life.

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

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Question 83

Multiple Choice

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On July 31,2015,Colora Printers purchased a printer for $50,000.It expects the printer to last for four years and has a residual value of $2,000.Compute the depreciation expense on the printer for the year ended December 31,2015,using the straight-line method.

Iverycoast Inc.purchased a van on January 1,2015,for $800,000.Estimated life of the van was 5 years,and its estimated residual value was $90,000.Iverycoast uses the straight-line method of depreciation.Give journal entry to record the purchase of van for cash.

On October 1,2015,Nurix Inc.purchased a patent for $200,000 cash.Although the patent gives legal protection for 20 years,the patent is expected to be used for only 10 years.What will be the balance in the patent account on September 30,2016?

A coal mine cost $1,000,000 and is estimated to hold 50,000 tons of coal.There is no residual value.6,000 tons are extracted and sold during the first year of operations.Calculate depletion expense for the first year.

Which of the following asset categories would include the cost of clearing land and removing unwanted buildings?

Iverycoast Inc.purchased a van on January 1,2015,for $800,000.Estimated life of the van was 5 years,and its estimated residual value was $90,000.Iverycoast uses the straight-line method of depreciation.Calculate the book value of the van at the end of 2015.

Redribbon Gallery reported the following assets on its December 31,2015 balance sheet: If the net sales for the year amounted to $850,000,what is the asset turnover ratio for 2015?

Acer Inc.plans to develop a shopping center.In the first quarter,they spent the following amounts: - What amount should be recorded as the cost of land in the books of the corporation?

A trademark should not be amortized over its useful life.