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Exam 16: Accounting for Property, plant, equipment, and Intangible Assets

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Question 21

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A gain on the sale of a plant asset is listed as:

A) a liability on the balance sheet.
B) an asset on the balance sheet.
C) other expense on the income statement.
D) other income on the income statement.

E) A) and B)
F) A) and D)

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Question 22

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When equipment that is fully depreciated is discarded:

A) debit the original cost of the asset.
B) credit the balance of Accumulated Depreciation.
C) debit Accumulated Depreciation and credit Equipment.
D) None of these answers are correct.

E) A) and C)
F) A) and B)

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Question 23

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R.J.Berkshire incurred the following expenditures to buy new equipment: $\begin{array} { l l } \text { Invoice, subject to 3\% dircount } & \$ 25,000 \\\text { Installation cost } & 1,800 \\\text { Insurance for equipment after installation } & 500 \\\text { 5ales tax } & 1,500\end{array}$ Discount taken The amount the Equipment account will be debited for is ________.

For tax purposes,the gain or loss on a traded asset is absorbed in the value of the new asset.

Assembly costs,and any other costs necessary to get a machine ready for operation,except for freight costs,would be added to the cost of the machine.

For each of the following, identify in column 1 the category to which the account belongs, in column 2 the normal balance for the account, in column 3 the financial statement that the account in which the account balance is reported, and in column 4 the account's nature (permanent/temporary). - $\begin{array} { | l | l | l | l | l | } \hline & \text { Column 1 } & \text { Column 2 } & \text { Column 3 } & \text { Column 4 } \\\hline \text { Land } & & & & \\\hline\end{array}$

For each of the following, identify in column 1 the category to which the account belongs, in column 2 the normal balance for the account, in column 3 the financial statement that the account in which the account balance is reported, and in column 4 the account's nature (permanent/temporary). - $\begin{array} { | l | l | l | l | l | } \hline & \text { Column 1 } & \text { Column } 2 & \text { Column } 3 & \text { Column } 4 \\\hline \text { Gain from sale of } & & & & \\\text { plant asset }\\\hline \end{array}$

Greetings Online disposed of a van that cost $22,000 with accumulated depreciation of $15,000.The journal entry would be to:

Lacy purchased equipment for $77,000 on January 1.Its residual value is $5,000 with a useful life of 9 years.The amount of depreciation expense in the first year under the straight-line method is:

For tax purposes,residential real property is depreciated using the straight-line method under MACRS.

A budgeted item such as a building is listed as a ________.

Revenue expenditures include:

Expenditures for changing oil in a machine or repainting a car would be:

A company purchases a patent for $50,000.The patent will be amortized over 5 years.The entry to record the amortization in the first year is:

A computer server system,which had cost $210,000 and had accumulated depreciation of $147,000,was traded for a new system with a fair market value of $235,000.The old system and cash of $180,000 were given for the new system.Prepare the journal entry for the exchange of these similar assets assuming the income tax method is used to record the exchange.

The entry to record the disposal of a laptop computer with a cost of $2,500 and an accumulated depreciation of $1,500 would be:

The amount to include in the entry to record the cost of a property,plant,and equipment asset would include:

What would be the depreciation expense in year 1,using units-of-production,for a molding machine that cost $18,000,had a useful life of 3 years,no residual value,and an estimated total machine hours of 36,000? Production in year 1 was 10,000 hours.

For each of the following, identify in column 1 the category to which the account belongs, in column 2 the normal balance for the account, in column 3 the financial statement that the account in which the account balance is reported, and in column 4 the account's nature (permanent/temporary). - $\begin{array} { | l | l | l | l | l | } \hline & \text { Column 1 } & \text { Column 2 } & \text { Column 3 } & \text { Column 4 } \\\hline \text { Building } & & & & \\\hline\end{array}$

Costs and assessments that should be charged to the land account include: