Acct 300 2

1. City Auto Parts recently traded in store fixtures. The exchange had commercial substance. The old fixtures had a cost of$52,000 and accumulated depreciation of$16,000. City paid$110,000 for the new store fixtures. These new fixtures had a market value of$113,000. There is a loss of$33,000 on this exchange.

True

False

2) Under U.S.GAAP, plant assets are reported at book value on the balance sheet.

True

False

3) A copy machine cost $45,000 when new and has accumulated depreciation of $ 44 $44,000. Suppose Print and Photo Center sold the machine for $1,000. What is the result of this disposaltransaction?

A.Loss of $44,000

B.Gain of $1,000

C.Loss of $1,000

D.No gain or loss

4) If a business changes the estimated usefullife, or estimated residualvalue, of a plantasset, depreciation expense must be recalculated.

True

False

5) The type of intangible asset related to the exclusive right to reproduce and sell a book or intellectual property is a________.

A.patent

B.franchise

C.trademark

D.copyright

6) An exchange of plant assets has commercial substance if the future cash flows change as a result of the transaction.

True

False

7) National Mining Company purchased amine, which holds an estimated 34,000 tons of ironore, on January1, 2018, for $519,000. The mine is expected to have zero residual value. The business extracted and sold 10,500 tons of ore in 2018 and 14,800 tons of ore in 2019. What is the depletion expense for2018? (Round any intermediate calculations to two decimalplaces, and your final answer to the nearestdollar.)

A.$225,848

B.$358,610

C.$160,230

D.$ 191,848

8) Which of the following requires businesses to recorddepreciation?

A.cost principle

B.revenue recognition principle

C.going concern principle

D.matching principle

10)

Regarding impairment of intangibleassets, which of the following statements isincorrect?

A.

Intangible assets with an indefinite life are tested for impairment annually.

B.

Impairment occurs when the fair value of an intangible asset is less than the book value.

C.

If any impairmentoccurs, the company records a loss in the period in which the intangible asset was acquired.

D.

Intangible assets are impaired when there has been a permanent decline in the value of the asset.

11) Which of the following is included in the cost of a plantasset?

A.

regular repair and maintenance costs

B.

amounts paid to make the asset ready for its intended use

C.

wages of workers who use the asset in normal operations

D.

replacement of damaged parts of the asset

12) The cost of an asset is $1,120,000, and its residual value is $260,000. Estimated useful life of the asset is five years. Calculate depreciation for the first year using the doubledecliningbalance method of depreciation.(Do not round any intermediatecalculations, and round your final answer to the nearestdollar.)

A.$344,000

B.$172,000

C.$224,000

D.$ 448,000

15) Which of the following is not included as furniture andfixtures?

A.

computers

B.

shelving

C.

file cabinets

D.

display racks

18) If a minor repair was incorrectly debited to the assetaccount, expenses and net income would be understated.

True

False

20) A natural resource is an asset that comes from the earth and is consumed.

True

False