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10 - 1 Plant Assets, Natural Resources, and Intangible Assets Ex. 263 Gorman Mining invested $960,000 in a mine estimated to have 1,200,000 tons of ore with no salvage value. During the first year, 200,000 tons of ore were mined and sold. InstructionsPrepare the journal entry to record depletion expense. Ex. 264 Kahn Mining Company purchased.
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10 - 1 Plant Assets, Natural Resources, and Intangible Assets Ex. 268 For each item listed below, enter a code letter in the blank space to indicate the allocation terminology for the item. Use the following codes for your answer: A—AmortizationP—Depletion D—DepreciationN—None of these ____              1. Goodwill              7.Timberlands ____              2.Land              8.Franchises (indefinite life) ____              3.Buildings              9.Licenses (limited life) ____             .
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11 - 1 Current Liabilities and Payroll Accounting 49.With an interest-bearing note, the amount of assets received upon issuance of the note is generally a.equal to the note's face value. b.greater than the note's face value. c.less than the note's face value. d.equal to the note's maturity value. 50.A note payable is in the form of a.a contingency.
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10 - 1 Plant Assets, Natural Resources, and Intangible Assets Ex. 246 The Hartley Clinic purchased a new surgical laser for $90,000. The estimated salvage value is $5,000. The laser has a useful life of five years and the clinic expects to use it 10,000 hours. It was used 1,600 hours in year.
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10 - 1 Plant Assets, Natural Resources, and Intangible Assets *Ex. 276 Dolan Company exchanges equipment with Eaton Company and Pawnee Company exchanges equipment with Fiero Company. The following information pertains to the exchanges: Dolan CompanyPawnee Company Equipment (cost)$228,000$192,000 Accumulated depreciation100,00090,000 Fair value of the equipment150,00084,000 Cash paid90,000-0- Instructions Prepare the journal entries to record the exchanges on the books.
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10 - 1 Plant Assets, Natural Resources, and Intangible Assets Ex. 239 Garrison Company was organized on January 1. During the first year of operations, the following expenditures and receipts were recorded in random order in the account, Land. Debits               1.Cost of real estate purchased as a plant site (land and building).$  250,000               2.Accrued.
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10 - 1 Plant Assets, Natural Resources, and Intangible Assets BE 232 On January 1, 2012, Santo Company purchased a computer system for $30,500. The system had an estimated useful life of 5 years and no salvage value. At January 1, 2014, the company revised the remaining useful life to two years. What.
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10 - 1 Plant Assets, Natural Resources, and Intangible Assets a207.The cost of a new asset acquired in an exchange that has commercial substance is the cash paid plus the a.book value of the old asset. b.fair value of the old asset. c.book value of the asset acquired. d.fair value of the new asset. 208.The cost of.
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10 - 1 Plant Assets, Natural Resources, and Intangible Assets 217.All of the following are intangible assets except a.copyrights. b.goodwill. c.patents. d.research and development costs. 218.A purchased patent has a legal life of 20 years. It should be a.expensed in the year of acquisition. b.amortized over 20 years regardless of its useful life. c.amortized over its useful life if less.
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10 - 1 Plant Assets, Natural Resources, and Intangible Assets MATCHING 303.Match the items below by entering the appropriate code letter in the space provided. A.Plant assetsF.Units-of-activity method B.DepreciationG.Double-declining-balance method C.Book valueH.MACRS D.Salvage valueI.Revenue expenditure E.Straight-line methodJ.Capital expenditure _____              1.Small expenditures which primarily benefit the current period. _____              2.Cost less accumulated depreciation. _____              3.An accelerated depreciation method used for financial statement.
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11 - 1 Current Liabilities and Payroll Accounting 11.Interest expense on a note payable is only recorded at maturity. 12.Interest expense is reported under Other Expenses and Losses in the income statement. 13.Unearned revenues should be classified as Other Revenues and Gains on the Income Statement. 14.The higher the sales tax rate, the more profit.
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10 - 1 Plant Assets, Natural Resources, and Intangible Assets Ex. 277 Bell Company and Kene Company exchanged trucks on January 1, 2012. Bell's truck cost $140,000, had accumulated depreciation of $115,000, and has a fair value of $15,000. Kene's truck cost $105,000, had accumulated depreciation of $90,000, and has a fair value.
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10 - 1 Plant Assets, Natural Resources, and Intangible Assets S-A E 311 How is a gain or loss on the sale of a plant asset computed? S-A E 312(Ethics) Physician Reference Service (PRS) provides services to physicians including research assistance, diagnosis coding and medical practice software including an advanced medical record cross-referencing system. PRS.
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11 - 1 Current Liabilities and Payroll Accounting 109.The accounting for warranty costs is based on the a.going concern principle. b.expense recognition principle. c.conservatism principle. d.historical cost principle. 110.Warranty expenses are reported on the income statement as a.administrative expenses. b.part of cost of goods sold. c.contra-revenues. d.selling expenses. 111.Lulzbot.com sells 6,000 units of its product for $500 each. The selling price includes.
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10 - 1 Plant Assets, Natural Resources, and Intangible Assets               289.The declining-balance method of computing depreciation is known as an _____________ depreciation method.               290.Ordinary repairs which maintain operating efficiency and expected productive life are called _______________.               291.Additions and improvements are costs incurred to increase the operating efficiency, productive capacity, or expected.
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10 - 1 Plant Assets, Natural Resources, and Intangible Assets EXERCISES Ex. 237 Hunt Company purchased factory equipment with an invoice price of $90,000. Other costs incurred were freight costs, $1,100; installation wiring and foundation, $2,200; material and labor costs in testing equipment, $700; oil lubricants and supplies to be used with equipment, $500;.
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10 - 1 Plant Assets, Natural Resources, and Intangible Assets Ex. 256 Karley Company sold equipment on July 1, 2014 for $75,000. The equipment had cost $210,000 and had $120,000 of accumulated depreciation as of January 1, 2014. Depreciation for the first 6 months of 2014 was $12,000. InstructionsPrepare the journal entry to record.
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11 - 1 Current Liabilities and Payroll Accounting MULTIPLE CHOICE QUESTIONS 39.All of the following are reported as current liabilities except a.accounts payable. b.bonds payable. c.notes payable. d.unearned revenues. 40.The relationship between current liabilities and current assets is a.useful in determining income. b.useful in evaluating a company's liquidity. c.called the matching principle. d.useful in determining the amount of a company's long-term debt. 41.Most.
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11 - 1 Current Liabilities and Payroll Accounting 139.By January 31 following the end of a calendar year, an employer is required to provide each employee with a(n) a.state unemployment tax form. b.federal unemployment tax form 940. c.wage and tax statement form W-2. d.employee's withholding allowance certificate form W-4. 140.Which of the following payroll taxes are usually.
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11 - 1 Current Liabilities and Payroll Accounting 149.A current liability is a debt the company reasonably expects to pay from existing current assets within a.one year. b.the operating cycle. c.one year or the operating cycle, whichever is longer. d.one year or the operating cycle, whichever is shorter. 150.Which of the following statements concerning current liabilities is.
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10 - 1 Plant Assets, Natural Resources, and Intangible Assets Ex. 272 Compute the asset turnover based on the following: Beginning total assets$   800,000 Ending total assets1,200,000 Net income300,000 Net sales2,500,000 Ex. 273 During 2014 Lopez Corporation reported net sales of $3,200,000 and net income of $1,200,000. Its balance sheet reported average total assets of $1,600,000. Instructions Calculate the asset turnover. Ex..
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10 - 1 Plant Assets, Natural Resources, and Intangible Assets Ex. 249 Hayden Company purchased a machine on January 1, 2014, at a cost of $90,000. It is expected to have an estimated salvage value of $5,000 at the end of its 5-year life. The company capitalized the machine and depreciated it in.
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11 - 1 Current Liabilities and Payroll Accounting 59.Interest expense on an interest-bearing note is a.always equal to zero. b.accrued over the life of the note. c.only recorded at the time the note is issued. d.only recorded at maturity when the note is paid. 60.The entry to record the payment of an interest-bearing note at maturity after.
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10 - 1 Plant Assets, Natural Resources, and Intangible Assets Ex. 261 Lynn Company owns equipment that cost $120,000 when purchased on January 1, 2011. It has been depreciated using the straight-line method based on estimated salvage value of $15,000 and an estimated useful life of 5 years. Instructions Prepare Lynn Company's journal entries to.
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10 - 1 Plant Assets, Natural Resources, and Intangible Assets Ex. 255 On January 1, 2012 Grier Company purchased and installed a telephone system at a cost of $20,000. The equipment was expected to last five years with a salvage value of $3,000. On January 1, 2013 more telephone equipment was purchased to.
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11 - 1 Current Liabilities and Payroll Accounting 21.A contingent liability is a liability that may occur if some future event takes place. 22.In concept, the estimating of Warranty Expense when products are sold under warranty is similar to the estimating of Bad Debt Expense based on credit sales. 23.FICA taxes and federal income.
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11 - 1 Current Liabilities and Payroll Accounting 89.Mast General Store has total receipts for the month of $45,990 including sales taxes. If the sales tax rate is 5%, what are Mast's sales for the month? a.$43,691 b.$43,800 c.$48,290 d.It cannot be determined. 90.A cash register tape shows cash sales of $5,000 and sales taxes of $300..
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10 - 1 Plant Assets, Natural Resources, and Intangible Assets Ex. 260 Zimmer Company sold the following two machines in 2014: Machine A Machine B Cost$76,000$80,000 Purchase date7/1/101/1/11 Useful life8 years5 years Salvage value$4,000$4,000 Depreciation methodStraight-lineDouble-declining-balance Date sold7/1/148/1/14 Sales price$35,000$16,000 Instructions Journalize all entries required to update depreciation and record the sales of the two assets in 2014. The company has recorded depreciation.
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10 - 1 Plant Assets, Natural Resources, and Intangible Assets BRIEF EXERCISES BE 227 Indicate whether each of the following expenditures should be classified as land (L), land improvements (LI), buildings (B), equipment (E), or none of these (X). _____1.Parking lots _____2.Electricity used by a machine _____3.Excavation costs _____4.Interest on building construction loan _____5.Cost of trial runs for machinery _____6.Drainage.
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10 - 1 Plant Assets, Natural Resources, and Intangible Assets Ex. 248 South Airlines purchased a 747 aircraft on January 1, 2013, at a cost of $35,000,000. The estimated useful life of the aircraft is 20 years, with an estimated salvage value of $5,000,000. On January 1, 2016 the airline revises the total.
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10 - 1 Plant Assets, Natural Resources, and Intangible Assets Ex. 270 During the current year, Marin Company incurred several expenditures. Briefly explain whether the expenditures listed below should be recorded as an operating expense or as an intangible asset. If you view the expenditure as an intangible asset, indicate the number of.
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10 - 1 Plant Assets, Natural Resources, and Intangible Assets Ex. 243 Dougan Company purchased equipment on January 1, 2013 for $90,000. It is estimated that the equipment will have a $5,000 salvage value at the end of its 5-year useful life. It is also estimated that the equipment will produce 100,000 units.
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10 - 1 Plant Assets, Natural Resources, and Intangible Assets Ex. 266 (a)A company purchased a patent on January 1, 2014, for $2,500,000. The patent's legal life is 20 years but the company estimates that the patent's useful life will only be 5 years from the date of acquisition. On June 30, 2014,.
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10 - 1 Plant Assets, Natural Resources, and Intangible Assets Ex. 251 Frank White the new controller of Youngman Company, has reviewed the expected useful lives and salvage values of selected depreciable assets at the beginning of 2014. His findings are as follows. Type of Asset Date Acquired Cost Accumulated Depreciation 1/1/14 Useful Lifein Years Salvage Value Old Proposed Old Proposed Buildings 1/1/08 $1,600,000 $228,000 40 50 $80,000 $52,000 Warehouse 1/1/09      207,000     40,000 25 20    .
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10 - 1 Plant Assets, Natural Resources, and Intangible Assets Ex. 259 Presented below are selected transactions for Werley Company for 2014. Jan.1Received $9,000 scrap value on retirement of machinery that was purchased on January 1, 2004. The machine cost $90,000 on that date, and had a useful life of 10 years with no.
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10 - 1 Plant Assets, Natural Resources, and Intangible Assets SHORT-ANSWER ESSAY QUESTIONS S-A E 305 The declining-balance method is an accelerated method of depreciation. Briefly explain what is meant by an accelerated method of depreciation and justify the choosing of an accelerated method. S-A E 306 Identify the factors that are considered in classifying an.
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10 - 1 Plant Assets, Natural Resources, and Intangible Assets Ex. 253 Foley Word Processing Service uses the straight-line method of depreciation. The company's fiscal year end is December 31. The following transactions and events occurred during the first three years. 2013July1Purchased a computer from the Computer Center for $1,900 cash plus sales tax.
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10 - 1 Plant Assets, Natural Resources, and Intangible Assets Ex. 265 Quayle Mining Company purchased land containing an estimated 15 million tons of ore at a cost of $4,200,000. The land without the ore is estimated to be worth $600,000. The company expects to operate the mine for 12 years. Buildings costing.
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10 - 1 Plant Assets, Natural Resources, and Intangible Assets 304.Match the items below by entering the appropriate code letter in the space provided. A.Gain on disposalF.Asset turnover B.Loss on disposalG.Goodwill C.TrademarkH.Amortization D.DepletionI.Intangible asset E.Useful lifeJ.Research and development costs _____              1.Process of allocating the cost of an intangible asset to expense over its useful life. _____              2.Is only recorded.
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11 - 1 Current Liabilities and Payroll Accounting TRUE-FALSE STATEMENTS 1.A current liability must be paid out of current earnings. 2.Current liabilities are expected to be paid within one year or the operating cycle, whichever is longer. 3.The relationship between current liabilities and current assets is important in evaluating a company's ability to pay off.
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10 - 1 Plant Assets, Natural Resources, and Intangible Assets Ex. 258 Grayson's Lumber Mill sold two machines in 2015. The following information pertains to the two machines: PurchaseUsefulSalvageDepreciationSales Machine   Cost Date   Life Value    Method  Date Sold  Price #1$66,0007/1/115 yrs.$6,000Straight-line7/1/15$15,000 #2$50,0007/1/145 yrs.$5,000Double-declining-12/31/15$30,000 balance Instructions (a)Compute the depreciation on each machine to the date of disposal. (b)Prepare the journal entries in 2015 to.
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10 - 1 Plant Assets, Natural Resources, and Intangible Assets COMPLETION STATEMENTS               279.With the exception of land, plant assets experience a ______________ in service potential over their useful lives.               280.When vacant land is acquired, expenditures for clearing, draining, filling, and grading should be charged to the ______________ account.               281.The cost of demolishing.
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11 - 1 Current Liabilities and Payroll Accounting 129.The following totals for the month of April were taken from the payroll register of Asplend Company. Salaries and wages$72,000 FICA taxes withheld5,508 Income taxes withheld15,000 Medical insurance deductions2,700 Federal unemployment taxes192 State unemployment taxes1,296 The entry to record accrual of Asplend Company’s payroll taxes would include a a.debit to Payroll Tax.
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10 - 1 Plant Assets, Natural Resources, and Intangible Assets Ex. 241 Ermler Company purchased a machine at a cost of $80,000. The machine is expected to have a $5,000 salvage value at the end of its 5-year useful life.InstructionsCompute annual depreciation for the first and second years using the(a)straight-line method.(b)double-declining-balance method. Ex. 242 Alvarado.
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11 - 1 Current Liabilities and Payroll Accounting 69.The interest charged on a $100,000 note payable, at the rate of 6%, on a 2-month note would be a.$6,000. b.$3,000. c.$1,500. d.$1,000. 70.On October 1, 2014, Dakota Company issued an $800,000, 10%, nine-month interest-bearing note. If the Dakota Company is preparing financial statements at December 31, 2014, the.
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11 - 1 Current Liabilities and Payroll Accounting 119.Sarah Jones's regular rate of pay is $30 per hour with one and one-half times her regular rate for any hours which exceed 40 hours per week. She worked 48 hours last week. Therefore, her gross wages were a.$1,440. b.$1,200. c.$1,560. d.$2,160. 120.Assuming a FICA tax rate of 7.65%.
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11 - 1 Current Liabilities and Payroll Accounting 99.The current ratio is a.current assets plus current liabilities. b.current assets minus current liabilities. c.current assets divided by current liabilities. d.current assets multiplied by current liabilities. 100.Monkee's Company has current assets of $45,000, current liabilities of $50,000, long-term assets of $90,000 and long-term liabilities of $40,000. Monkee's Company's working.
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11 - 1 Current Liabilities and Payroll Accounting 79.A cash register tape shows cash sales of $3,000 and sales taxes of $240. The journal entry to record this information is a.Cash3,240 Sales Revenue3,240 b.Cash3,240 Sales Taxes Payable240 Sales Revenue3,000 c.Cash3,000 Sales Tax Expense240 Sales Revenue3,240 d.Cash3,240 Sales Revenue3,000 Sales Tax Revenue240 80.Maple Street Bookstore has collected $1,500 in sales taxes during April. If sales.
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10 - 1 Plant Assets, Natural Resources, and Intangible Assets Ex. 244 A plant asset acquired on October 1, 2014, at a cost of $400,000 has an estimated useful life of 10 years. The salvage value is estimated to be $40,000 at the end of the asset's useful life. Instructions Determine the depreciation expense for.
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11 - 1 Current Liabilities and Payroll Accounting 31.A debt that is expected to be paid within one year through the creation of long-term debt is a current liability. 32.Notes payable usually are issued to meet long-term financing needs. 33.Current maturities of long-term debt are often identified as long-term debt due within one year.
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