On January 1, 20X3, Hilton Inc. buys equipment for $80,000 with a ten-year life and no expected residual value. Depreciation is applied using the units-of-production method. The equipment is expected to produce 4,000,000 units. Units produced during 20X3 total 500,000. On December 31, 20X3, when this equipment is worth $69,000, it is traded for a truck that is worth $78,000. Hilton also gives cash of $9,000. What gain or loss is recognized on this asset exchange?

Group of answer choices

$3,000 loss

$4,000 gain

$1,000 loss

$4,000 gain

Question 47

Ben Corporation began the year with $350,000 in total assets and ended the year with $420,000 in total assets. Sales for the year were $500,000. Total expenses incurred during the year amounted to $435,000. Compute Ben's total asset turnover for the year.

Group of answer choices

1.30 times

1.43 times

1.19 times

1.13 times

Question 46

1.67pts

Which of the following is true of intangible assets?

Group of answer choices

In accounting for a parent's acquisition of a subsidiary, the amount paid for intangible assets is based on the cost at which the asset was originally acquired.

U.S. GAAP requires companies to follow the historical cost principle in reporting its intangible assets.

The balance reported for intangible assets represent the amount that an acquiring company will pay to buy those assets.

Internally developed intangible assets increase a company's intangible asset figures to grow to an incredible size.

Any appreciation in the value of an intangible asset is adjusted by raising it to the fair value.

Question 45

Copyrights last for 80 years beyond the creator's life.

Group of answer choices

True

False

Question 44

An asset's book value is its original cost less its accumulated depreciation to date.

Group of answer choices

True

False

Question 43

1.67pts

The amount of change in the fair value of an equity investment is:

Group of answer choices

reported as Investment Income or Investment Expense.

is taken into account only at the time of sale.

ignored unless permanent drop in value occurs.

included within stockholders' equity section.

included in the net income.

Question 42

Kendall Company owns 20% of Lester Corporation and accounts for the investment using the equity method. At the beginning of the year, the balance in the investment account was $290,000. During the year, Kendall earned net income of $70,000 and distributed cash dividends of $14,000. Which of the following is true?

Group of answer choices

The balance in the Investment in Lester account decreased this year.

Kendall's Investment Income for the year was $2,800.

The balance in the Investment in Lester account at the end of the year was $304,000.

Kendall had an increase in cash from this investment of $2,800.