1 Which of the following would be classified as a tangible asset A Copyright B Goodwill C Iron ore deposit D Patent 2 Which of the following would be classified as a long term operational asset A Accounts receivable B Treasury stock C Inventory D Goodwill 3 Which of the following would not be classified as a tangible long term asset A Delivery trucks B Franchises C Land D Oil and gas reserves 4 Which of the following terms is used to identify the process of expense recognition for property, plant and equipment A Amortization B Depletion C Depreciation D Revision Benton Corporation acquired real estate that contained land, building and equipment The property cost Benton $825,000 Benton paid $175,000 and issued a note payable for the remainder of the cost An appraisal of the property reported the following values Land, $85,000 Building, $625,000 and Equipment, $250,000 5 What value will be recorded for the building A 113,932 B 406,901 C 537,109 D 625,000 6 Assume that Benton uses the units of production method when depreciating its equipment Benton assumes estimates that the purchased equipment will produce 1,200,000 units over its 5 year useful life and has salvage value of $7,500 Benton produced 265,000 units with the equipment by the end of the first year of purchase What amount will Benton record for depreciation expense for the equipment in the first year A $8,408 B $41,469 C $45,788 D $82,938 7 On January 6, 2008, the El Gato Corporation purchased a tract of land for a factory site for $500,000 An existing building on the site was demolished and the new factory was completed on October 11, 2008 Additional cost data are shown below Title search and transfer documents $1,500 Construction cost of new building 800,000 Real estate and attorney fees 6,200 Fines (related to demolition) 500 Architects fees 9,000 Cost to demolish old building 52,000 Salvage recovery from old building (4,000) Which of the following correctly states the capitalized cost of the (a) land and (b) the new building A $501,500 $863,700 B $508,200 $857,000 C $556,200 $800,000 D $555,700 $809,000 8 On January 1, 2008 Morgan Co purchased a truck that cost $32,000 The truck had an expected useful life of 10 years and a $5,000 salvage value The amount pf depreciation expense recognized in 2009 assuming that Morgan auses the double declining balance method is A $4,320 B $5,120 C $5,400 D $6,400 9 Tvelyn Company purchased equipment that cost $55,000 cash on January 1, 2007 The equipment had an expected useful life of six years and an estimated salvage value of $4,000 Assuming that Evelyn depreciates its assets under the straight line method, the amount of depreciation expense appearing on the 2010 income statement and the amount of accumulated depreciation appearing on the December 31, 2010 balance sheet would be Depreciation Accumulated Expense Depreciation A $8,500 $34,000 B $8,500 $8,500 C $34,000 $8,500 D $8,500 $25,500 10 WadoCompany was started on January 1, 2005 when it issued common stock for $15,000 cash Also on January 1, 2005 the company purchased office equipment that cost $15,000 cash The equipment was delivered under terms FOB shipping point, and transportation cost was $1,000 The equipment had a five year useful life and a $1,200 expected salvage value Assume that Wade Company earned $5,000 cash revenue in 2007 Using straight line depreciation and assuming that the office equipment was sold on 12 31 07 for $6,000, the amount of net income or net loss appearing on the December 31, 2007 income statement would be A $1,920 B $2,960 C $920 D $7,400 11 If Wade Company had used the double declining balance depreciation method, the depreciation expense appearing on the 2007 income statement would be A $2,131 B $2,304 C $5,920 D $6,420 12 Which of the following statements is true concerning the modified accelerated cost recovery system (MACRS) for the recognition of depreciation expense A 7 year property will be depreciated more rapidly than 10 year property under the MACRS depreciation method B Under MACRS more depreciation will be recorded in the second accounting period than in the first accounting period because of the half year convention C MACRS is used for the determination of depreciation expense that is reported on an income tax return D All of these statements are true 13 On January 1, 2006 Brie Company spent $3,000 on an asset to improve its quality The asset had been purchased on January 1, 2005 for $14,000 The asset had a $2,000 salvage value and a 6 year life Brie uses straight line depreciation What would be the book value of the asset on January 1, 2007 A $11,000 B $10,000 C $12,400 D $7,200 14 On January 1, 2005 Fitzgerald Company paid $14,000 cash to extend the useful life of a machine Which of the following general journal entries would be required to recognize this expenditure A Accumulated Depreciation 14,000 Cash 14,000 B Depreciation Expense 14,000 Cash 14,000 C Machine 14,000 Cash 14,000 D Retained Earnings 14,000 Cash 14,000 15 On April 1, 2008, Marlin Company purchased a producing oil well at a cash cost of $3,500,000 It is estimated that 500,000 barrels of oil can be produced over the remaining life of the well By December 31, 2008, 25,000 barrels of oil were produced and sold The amount of depletion expense for 2008 on this well would be A $175,000 B $200,000 C $180,000 D $120,000 16 Which of the following terms is applied to long term assets that have no physical substance and provide rights, privileges and special opportunities to businesses A Current assets B Intangible assets C Natural resources D Property, plant and equipment 17 Goodwill may be recorded in which of the following circumstances A When the property, plant and equipment of a business increase in value B When a business earns a very high net income C When one business purchases another business D All of these 18 Which of the following assets are considered to have indefinite useful lives A goodwill B copyrights C patents D All of these 19 Which of the following general journal entries shows the proper recording Of an impairment loss of $13,000 for goodwill A Goodwill 13,000 Impairment Loss 13,000 B Retained Earnings 13,000 Goodwill 13,000 C Impairment Loss 13,000 Goodwill 13,000 D Depletion Expense 13,000 Allowance for Impairment 13,000 20 On January 1, 2005, Stetson Company paid $160,000 to obtain a patent Stetson expected to use the patent for 5 years before it became technologically obsolete Based on this information, the amount of amortization expense on the December 31, 2007 income statement and the book value of the patent on the December 31, 2007 balance sheet would be A $32,000 $64,000 B $32,000 $96,000 C $64,000 $64,000 D $64,000 $96,000

Question

1  Which of the following would be classified as a tangible asset  A  Copyright  B  Goodwill  C  Iron ore deposit  D  Patent 2  Which of the following would be classified as a long term operational asset  A  Accounts receivable  B  Treasury stock  C  Inventory  D  Goodwill  3  Which of the following would not be classified as a tangible long term asset  A  Delivery trucks B  Franchises C  Land D  Oil and gas reserves 4  Which of the following terms is used to identify the process of expense recognition for property, plant and equipment  A  Amortization B  Depletion C  Depreciation D  Revision Benton Corporation acquired real estate that contained land, building and equipment  The property cost Benton $825,000  Benton paid $175,000 and issued a note payable for the remainder of the cost  An appraisal of the property reported the following values  Land, $85,000  Building, $625,000 and Equipment, $250,000  5  What value will be recorded for the building  A  113,932 B  406,901 C  537,109 D  625,000 6  Assume that Benton uses the units of production method when depreciating its equipment  Benton assumes estimates that the purchased equipment will produce 1,200,000 units over its 5 year useful life and has salvage value of $7,500  Benton produced 265,000 units with the equipment by the end of the first year of purchase  What amount will Benton record for depreciation expense for the equipment in the first year  A  $8,408 B  $41,469 C  $45,788 D  $82,938 7  On January 6, 2008, the El Gato Corporation purchased a tract of land for a factory site for $500,000  An existing building on the site was demolished and the new factory was completed on October 11, 2008  Additional cost data are shown below  Title search and transfer documents $1,500 Construction cost of new building 800,000 Real estate and attorney fees 6,200 Fines (related to demolition) 500 Architects fees 9,000 Cost to demolish old building 52,000 Salvage recovery from old building (4,000) Which of the following correctly states the capitalized cost of the (a) land and (b) the new building  A  $501,500 $863,700 B  $508,200 $857,000 C  $556,200 $800,000 D  $555,700 $809,000 8  On January 1, 2008 Morgan Co  purchased a truck that cost $32,000  The truck had an expected useful life of 10 years and a $5,000 salvage value  The amount pf depreciation expense recognized in 2009 assuming that Morgan auses the double declining balance method is  A  $4,320 B  $5,120 C  $5,400 D  $6,400 9  Tvelyn Company purchased equipment that cost $55,000 cash on January 1, 2007  The equipment had an expected useful life of six years and an estimated salvage value of $4,000  Assuming that Evelyn depreciates its assets under the straight line method, the amount of depreciation expense appearing on the 2010 income statement and the amount of accumulated depreciation appearing on the December 31, 2010 balance sheet would be  Depreciation Accumulated Expense Depreciation A  $8,500 $34,000 B  $8,500 $8,500 C  $34,000 $8,500 D  $8,500 $25,500 10  WadoCompany was started on January 1, 2005 when it issued common stock for $15,000 cash  Also on January 1, 2005 the company purchased office equipment that cost $15,000 cash  The equipment was delivered under terms FOB shipping point, and transportation cost was $1,000  The equipment had a five year useful life and a $1,200 expected salvage value  Assume that Wade Company earned $5,000 cash revenue in 2007  Using straight line depreciation and assuming that the office equipment was sold on 12 31 07 for $6,000, the amount of net income or net loss appearing on the December 31, 2007 income statement would be  A  $1,920  B  $2,960  C  $920  D  $7,400  11  If Wade Company had used the double declining balance depreciation method, the depreciation expense appearing on the 2007 income statement would be  A  $2,131  B  $2,304  C  $5,920  D  $6,420  12  Which of the following statements is true concerning the modified accelerated cost recovery system (MACRS) for the recognition of depreciation expense  A  7 year property will be depreciated more rapidly than 10 year property under the MACRS depreciation method  B  Under MACRS more depreciation will be recorded in the second accounting period than in the first accounting period because of the half year convention  C  MACRS is used for the determination of depreciation expense that is reported on an income tax return  D  All of these statements are true  13  On January 1, 2006 Brie Company spent $3,000 on an asset to improve its quality  The asset had been purchased on January 1, 2005 for $14,000  The asset had a $2,000 salvage value and a 6 year life  Brie uses straight line depreciation  What would be the book value of the asset on January 1, 2007  A  $11,000  B  $10,000  C  $12,400  D  $7,200  14  On January 1, 2005 Fitzgerald Company paid $14,000 cash to extend the useful life of a machine  Which of the following general journal entries would be required to recognize this expenditure  A  Accumulated Depreciation 14,000 Cash 14,000 B  Depreciation Expense 14,000 Cash 14,000 C  Machine 14,000 Cash 14,000 D  Retained Earnings 14,000 Cash 14,000 15  On April 1, 2008, Marlin Company purchased a producing oil well at a cash cost of $3,500,000  It is estimated that 500,000 barrels of oil can be produced over the remaining life of the well  By December 31, 2008, 25,000 barrels of oil were produced and sold  The amount of depletion expense for 2008 on this well would be  A  $175,000  B  $200,000  C  $180,000  D  $120,000  16  Which of the following terms is applied to long term assets that have no physical substance and provide rights, privileges and special opportunities to businesses  A  Current assets B  Intangible assets C  Natural resources D  Property, plant and equipment 17  Goodwill may be recorded in which of the following circumstances  A  When the property, plant and equipment of a business increase in value  B  When a business earns a very high net income  C  When one business purchases another business  D  All of these  18  Which of the following assets are considered to have indefinite useful lives  A  goodwill B  copyrights C  patents D  All of these 19  Which of the following general journal entries shows the proper recording Of an impairment loss of $13,000 for goodwill  A  Goodwill 13,000 Impairment Loss 13,000 B  Retained Earnings 13,000 Goodwill 13,000 C  Impairment Loss 13,000 Goodwill 13,000 D  Depletion Expense 13,000 Allowance for Impairment 13,000 20  On January 1, 2005, Stetson Company paid $160,000 to obtain a patent  Stetson expected to use the patent for 5 years before it became technologically obsolete  Based on this information, the amount of amortization expense on the December 31, 2007 income statement and the book value of the patent on the December 31, 2007 balance sheet would be  A  $32,000 $64,000  B  $32,000 $96,000  C  $64,000 $64,000  D  $64,000 $96,000

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1. Which of the following would be classified as a tangible asset? A. Copyright. B. Goodwill. C. Iron ore deposit. D. Patent 2. Which of.the

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