134.
A company purchased a tract of land for its natural resources at a cost of $1,000,000. It
expects to harvest 5,000,000 board feet of timber from this land. The salvage value of the
land is expected to be $200,000. The depletion expense per board foot of timber is:
8-82
135.
A company purchased a mineral deposit for $800,000. It expects this property to produce
120,000 tons of minerals and to have a salvage value of $50,000. In the current year, the
company mined and sold 9,000 tons of minerals. Its depletion expense for the current
period equals:
136.
Intangible assets do
not
include:
AACSB: Communication
137.
Amortization is:
138.
Owning a patent:
139.
Holding a copyright:
140.
A leasehold is:
141.
The specific meaning of goodwill in accounting is:
142.
A company’s old machine that cost $40,000 and had accumulated depreciation of $22,000
was traded in on a new machine having an estimated 20-year life with an invoice price of
$45,000. The company also paid $33,000 cash, along with its old machine to acquire the
new machine. If this transaction has commercial substance, the new machine should be
recorded at:
143.
Hunter Sailing Company exchanged an old sailboat for a new one. The old sailboat had a
cost of $160,000 and accumulated depreciation of $100,000. The new sailboat had an
invoice price of $270,000. Hunter received a trade in allowance of $70,000 on the old
sailboat, which meant the company paid $200,000 in addition to the old sailboat to acquire
the new sailboat. If this transaction lacks commercial substance, what amount of gain or
loss should be recorded on this exchange?
144.
Cliff Company traded in an old truck for a new one. The old truck had a cost of $75,000
and accumulated depreciation of $60,000. The new truck had an invoice price of $125,000.
Huffington was given a $12,000 trade-in allowance on the old truck, which meant they
paid $113,000 in addition to the old truck to acquire the new truck. If this transaction has
commercial substance, what is the recorded value of the new truck?
145.
A company bought new heating system for $42,000 and was given a trade-in of $2,000 on
an old heating system, so the company paid $40,000 cash with the trade-in. The old
system had an original cost of $37,000 and accumulated depreciation of $34,000. If the
transaction has commercial substance, the company should record the new heating
system at:
146.
A company purchased equipment valued at $66,000. It traded in old equipment for a
$9,000 trade-in allowance and the company paid $57,000 cash with the trade-in. The old
equipment cost $44,000 and had accumulated depreciation of $36,000. This transaction
has commercial substance. What is the recorded value of the new equipment?
147.
Which of the following statements regarding increases in the value of plant assets under
U.S. GAAP and IFRS is true?
148.
Granite 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. Compute the cost recorded for this machine assuming
Granite paid within the discount period.
149.
Wickland Company installs a manufacturing machine in its production facility at the
beginning of the year at a cost of $87,000. The machine’s useful life is estimated to be 5
years, or 400,000 units of product, with a $7,000 salvage value. During its second year, the
machine produces 84,500 units of product. Determine the machines’ second year
depreciation under the straight-line method.
150.
Wickland Company installs a manufacturing machine in its production facility at the
beginning of the year at a cost of $87,000. The machine’s useful life is estimated to be 5
years, or 400,000 units of product, with a $7,000 salvage value. During its second year, the
machine produces 84,500 units of product. Determine the machines’ second year
depreciation under the double-declining-balance method.
151.
Wickland Company installs a manufacturing machine in its production facility at the
beginning of the year at a cost of $87,000. The machine’s useful life is estimated to be 5
years, or 400,000 units of product, with a $7,000 salvage value. During its second year, the
machine produces 84,500 units of product. Determine the machines’ second year
depreciation under the units-of-production method.
152.
Wickland Company installs a manufacturing machine in its production facility at the
beginning of the year at a cost of $87,000. The machine’s useful life is estimated to be 5
years, or 400,000 units of product, with a $7,000 salvage value. During its second year, the
machine produces 84,500 units of product. What journal entry would be needed to record
the machines’ second year depreciation under the units–of-production method?
153.
Minor Company installs a machine in its factory at the beginning of the year at a cost of
$135,000. The machine’s useful life is estimated to be 5 years, or 300,000 units of product,
with a $15,000 salvage value. During its first year, the machine produces 64,500 units of
product. Determine the machines’ first year depreciation under the straight-line method.
154.
Minor Company installs a machine in its factory at the beginning of the year at a cost of
$135,000. The machine’s useful life is estimated to be 5 years, or 300,000 units of product,
with a $15,000 salvage value. During its first year, the machine produces 64,500 units of
product. Determine the machines’ first year depreciation under the double-declining-
balance method.
155.
Minor Company installs a machine in its factory at the beginning of the year at a cost of
$135,000. The machine’s useful life is estimated to be 5 years, or 300,000 units of product,
with a $15,000 salvage value. During its first year, the machine produces 64,500 units of
product. Determine the machines’ first year depreciation under the units–of-production
method.