Question

In: Accounting

1. Name three examples of property, plant and equipment. 2. Give an example of an intangible...

1. Name three examples of property, plant and equipment.

2. Give an example of an intangible asset with an identifiable useful life.

Why is land classified separately from other tangible long-term assets?

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the

question.

4. Which of the following would be classified as a tangible asset?

A)

Trademark.

B)

Goodwill.

C)

Land.

D)

Copyright.

5. Which of the following would be classified as a long-term operational asset?

A)

Inventory.

B)

Trademark.

C)

Notes receivable.

D)

Accounts receivable.

6. Which of the following terms is used to identify the process of expense recognition for

property, plant and equipment?

A)

Depreciation

B)

Revision

C)

Depletion

D)

Amortization

7. Harding Corporation acquired real estate that contained land, building and equipment.

The property cost Harding $1,900,000. Harding paid $350,000 and issued a note

payable for the remainder of the cost. An appraisal of the property reported the

following values: Land, $374,000; Building, $1,100,000 and Equipment, $726,000.

What value will be recorded for the building?

A)

$950,000

B)

$1,100,000

C)

$175,000

D)

$800,000

8. Harding Corporation acquired real estate that contained land, building and equipment.

The property cost Harding $1,900,000. Harding paid $350,000 and issued a note

payable for the remainder of the cost. An appraisal of the property reported the

following values: Land, $374,000; Building, $1,100,000 and Equipment, $726,000.

Assume that Harding uses the units of production method when depreciating its

equipment. Harding estimates that the purchased equipment will produce 1,000,000

units over its 5-year useful life and has salvage value of $34,000. Harding produced

265,000 units with the equipment by the end of the first year of purchase.

Which amount below is closest to the amount Harding will record for depreciation

expense for the equipment in the first year?

A)

$193,450

B)

$165,890

C)

$125,200

D)

$157,145

9. On January 6, 2016, the Mount Jackson Corporation purchased a tract of land for a

factory site for $1,500,000. An existing building on the site was demolished and the

new factory was completed on October 11, 2016. Additional cost data are shown below:

Construction cost or new building

$1,760,000

Real estate and attorney fees

                 15,400

Architect fees

               138,000

Cost to demolish old building

               133,200

Salvage recovery from old building

                (11,000)

Which of the following correctly states the capitalized cost of the (a) land and (b) the

new building?

A)

$1,500,000/$2,035,600

B)

$1,648,600/$1,887,000

C)

$1,637,600/$1,898,000

D)

$1,515,400/$2,020,200

10. On January 1, 2016, Phillips Company made a basket purchase including land, a

building and equipment for $380,000. The appraised values of the assets are $20,000

for the land, $340,000 for the building and $40,000 for equipment. Phillips uses the

double declining balance method of depreciation for the equipment which is estimated

to have a useful life of four years and a salvage value of $5,000. The depreciation

expense for 2016 for the equipment is:

A)

$9,500.

B)

$19,000.

C)

$20,000.

D)

$17,000.

Exam
Name_________________________________
ESSAY. Write your answer in the space provided or on a separate sheet of paper.
1)
Name three examples of property, plant and equipment.
2)
Give an example of an intangible asset with an identifiable useful life.
3)
Why is land classified separately from other tangible long-term assets?
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the
question.
4)
Which of the following would be classified as a tangible asset?
A)
Trademark.
B)
Goodwill.
C)
Land.
D)
Copyright.
4)
5)
Which of the following would be classified as a long-term operational asset?
A)
Inventory.
B)
Trademark.
C)
Notes receivable.
D)
Accounts receivable.
5)
6)
Which of the following terms is used to identify the process of expense recognition for
property, plant and equipment?
A)
Depreciation
B)
Revision
C)
Depletion
D)
Amortization
6)
7)
Harding Corporation acquired real estate that contained land, building and equipment.
The property cost Harding $1,900,000. Harding paid $350,000 and issued a note
payable for the remainder of the cost. An appraisal of the property reported the
following values: Land, $374,000; Building, $1,100,000 and Equipment, $726,000.
What value will be recorded for the building?
A)
$950,000
B)
$1,100,000
C)
$175,000
D)
$800,000
7)
8)
Harding Corporation acquired real estate that contained land, building and equipment.
The property cost Harding $1,900,000. Harding paid $350,000 and issued a note
payable for the remainder of the cost. An appraisal of the property reported the
following values: Land, $374,000; Building, $1,100,000 and Equipment, $726,000.
Assume that Harding uses the units of production method when depreciating its
equipment. Harding estimates that the purchased equipment will produce 1,000,000
units over its 5-year useful life and has salvage value of $34,000. Harding produced
265,000 units with the equipment by the end of the first year of purchase.
Which amount below is closest to the amount Harding will record for depreciation
expense for the equipment in the first year?
A)
$193,450
B)
$165,890
C)
$125,200
D)
$157,145
8)
1
9)
On January 6, 2016, the Mount Jackson Corporation purchased a tract of land for a
factory site for $1,500,000. An existing building on the site was demolished and the
new factory was completed on October 11, 2016. Additional cost data are shown below:
Construction cost or new building
$1,760,000
Real estate and attorney fees
15,400
Architect fees
138,000
Cost to demolish old building
133,200
Salvage recovery from old building
(11,000)
Which of the following correctly states the capitalized cost of the (a) land and (b) the
new building?
A)
$1,500,000/$2,035,600
B)
$1,648,600/$1,887,000
C)
$1,637,600/$1,898,000
D)
$1,515,400/$2,020,200
9)
10)
On January 1, 2016, Phillips Company made a basket purchase including land, a
building and equipment for $380,000. The appraised values of the assets are $20,000
for the land, $340,000 for the building and $40,000 for equipment. Phillips uses the
double declining balance method of depreciation for the equipment which is estimated
to have a useful life of four years and a salvage value of $5,000. The depreciation
expense for 2016 for the equipment is:
A)
$9,500.
B)
$19,000.
C)
$20,000.
D)
$17,000.
Exam
Name___________________________________
ESSAY. Write your answer in the space provided or on a separate sheet of paper.
1)
Name three examples of property, plant and equipment.
2)
Give an example of an intangible asset with an identifiable useful life.
3)
Why is land classified separately from other tangible long-term assets?
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the
question.
4)
Which of the following would be classified as a tangible asset?
A)
Trademark.
B)
Goodwill.
C)
Land.
D)
Copyright.
4)
5)
Which of the following would be classified as a long-term operational asset?
A)
Inventory.
B)
Trademark.
C)
Notes receivable.
D)
Accounts receivable.
5)
6)
Which of the following terms is used to identify the process of expense recognition for
property, plant and equipment?
A)
Depreciation
B)
Revision
C)
Depletion
D)
Amortization
6)
7)
Harding Corporation acquired real estate that contained land, building and equipment.
The property cost Harding $1,900,000. Harding paid $350,000 and issued a note
payable for the remainder of the cost. An appraisal of the property reported the
following values: Land, $374,000; Building, $1,100,000 and Equipment, $726,000.
What value will be recorded for the building?
A)
$950,000
B)
$1,100,000
C)
$175,000
D)
$800,000
7)
8)
Harding Corporation acquired real estate that contained land, building and equipment.
The property cost Harding $1,900,000. Harding paid $350,000 and issued a note
payable for the remainder of the cost. An appraisal of the property reported the
following values: Land, $374,000; Building, $1,100,000 and Equipment, $726,000.
Assume that Harding uses the units of production method when depreciating its
equipment. Harding estimates that the purchased equipment will produce 1,000,000
units over its 5-year useful life and has salvage value of $34,000. Harding produced
265,000 units with the equipment by the end of the first year of purchase.
Which amount below is closest to the amount Harding will record for depreciation
expense for the equipment in the first ye9)
On January 6, 2016, the Mount Jackson Corporation purchased a tract of land for a
factory site for $1,500,000. An existing building on the site was demolished and the
new factory was completed on October 11, 2016. Additional cost data are shown below:
Construction cost or new building
$1,760,000
Real estate and attorney fees
15,400
Architect fees
138,000
Cost to demolish old building
133,200
Salvage recovery from old building
(11,000)
Which of the following correctly states the capitalized cost of the (a) land and (b) the
new building?
A)
$1,500,000/$2,035,600
B)
$1,648,600/$1,887,000
C)
$1,637,600/$1,898,000
D)
$1,515,400/$2,020,200
9)
10)
On January 1, 2016, Phillips Company made a basket purchase including land, a
building and equipment for $380,000. The appraised values of the assets are $20,000
for the land, $340,000 for the building and $40,000 for equipment. Phillips uses the
double declining balance method of depreciation for the equipment which is estimated
to have a useful life of four years and a salvage value of $5,000. The depreciation
expense for 2016 for the equipment is:
A)
$9,500.
B)
$19,000.
C)
$20,000.
D)
$17,000.

Solutions

Expert Solution

(1) Three examples of Property, Plant and Equipment:

(a) Office Building and Office Equipment

(b) Machinery and Motor Vehicle

(c) Furniture and Fixture

(2) Copyright is an example of an intangible asset with an identifiable useful life (limited life).

(3) The land is classified separately from other tangible long-term assets because land has an infinite life. It is not consumed or worn out with use.

(4) Option(C) is correct.

Explanation: Land is considered as the tangible asset because it has a physical existence.

(5) Option(B) is correct.

Explanation: Trademark is a long-term operational asset because such assets are used for extended period of times (two or more accounting periods).

(6) Option(A) is correct.

Explanation: property, plant and equipment are fixed assets that follow the process of depreciation expense recognition.

(7) Option(A) is correct.

Explanation: Appraisal value of the property = 374000+1100000+726000 = $2,200,000

Appraisal value of building = $1,100,000

Therefore, building to be recorded = (1100000*1900000)/2200000 = $950,000

(8) Option(D) is correct.

Explanation: Value of equipment = (1900000*726000)/2200000 = $627,000

Depreciation to be recorded = [265000*(627000-34000)]/1000000 = $157,145

(9) Option(C) is correct.

Explanation: Land = 1500000+15400+133200-11000 = $1,637,600

Building = 1760000+138000 = $1,898,000

(10) Option(B) is correct.

Explanation: Book value of the equipment = (40000*380000)/(20000+340000+40000) = $38,000

Depreciation = 38000*[(1/4)*2] = 38000*50% = $19,000

ekkarill92 answered 1 year ago
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