大学一年级下学期会计学原理练习及答案-Chapter_10_SM

Chapter 10Plant Assets, Natural Resources,and IntangiblesQUESTIONS1. A plant asset is tangible; it is used in the production or sale of other assets or services;and it has a useful life longer than one accounting period.2. The cost of a plant asset includes all normal and reasonable expenditures necessary toget the asset in place and ready for its intended use.3. Land is an asset with an unlimited life and, therefore, is not subject to depreciation.Land improvements have limited lives and are subject to depreciation.4. Often the lump-sum or basket purchase includes assets with different lives that must bedepreciated separately. Sometimes the purchase may include land, which is never depreciated.5. The Accumulated Depreciation—Machinery account is a contra asset account with acredit balance that cannot be used to buy anything. The balance of the Accumulated Depreciation—Machinery account reflects that portion of the machinery's original cost that has been charged to depreciation expense. It also gives some indication of the asset’s age and how soon it will need to be replaced. Any funds available for buying machinery are shown on the balance sheet as liquid assets with debit balances.6. The Modified Accelerated Cost Recovery System is not generally acceptable forfinancial accounting purposes because it allocates depreciation over an arbitrary period that is usually much shorter than the predicted useful life of the asset.7. The materiality constraint justifies charging low-cost plant asset purchases to expensebecause such amounts are unlikely to impact the decisions of financial statement users.8. Ordinary repairs are made to keep a plant asset in normal, good operating condition,and should be charged to expense of the current period. Extraordinary repairs are made to extend the life of a plant asset beyond the original estimated life; they are recorded as capital expenditures (and added to the asset account).9. A pany might sell or exchange an asset when it reaches the end of its useful life, or if itbees inadequate or obsolete, or if the pany has changed its business plans. An asset also can be damaged or destroyed by fire or some other accident that would require its disposal.10. The process of allocating the cost of natural resources to expense over the periodswhen they are consumed is called depletion. The method to pute depletion is similar to units-of-production depreciation.11. No, depletion expense should be calculated on the units that are extracted (similar tothe units-of-production basis) and sold.12. An intangible asset: (1) has no physical existence; (2) derives value from the uniquelegal and contractual rights held by its owner; and (3) is used in the pany’s operations. 13. Intangible assets are generally recorded at their cost and amortized over their predicteduseful life. (However, some costs are not included, such as the research and development costs leading up to a patent.) The costs of intangible assets are generally allocated to amortization expense using the straight-line method over their useful lives.If the useful life of an intangible asset is indefinite, then it is not amortized—instead, it is annually tested for impairment.14. A pany has goodwill when its value exceeds the value of its individual assets andliabilities. Goodwill appears in the balance sheet when one pany acquires another pany or separate segment and pays a price that exceeds the bined values of all its assets (assets less liabilities) excluding goodwill.15. No; this type of goodwill would not be amortized. Instead, the FASB (SFAS 142)requires that goodwill be annually tested for impairment. If the book value of goodwill does not exceed its fair (market) value, goodwill is not impaired. However, if the book value of goodwill exceeds its fair value, an impairment loss is recorded equal to that excess. (Details of this two-step test are in advanced courses.)16. Total asset turnover is calculated by dividing sales by average total assets. Financialstatement users can use total asset turnover to evaluate the efficiency of a pany in using its assets to generate sales.17. Best Buy lists Land and buildings; Leasehold improvements; Fixtures and equipment;Property under capital lease. The book value of these assets is $2,938,000,000.18. Circuit City calls its plant assets “Property and equipment, of accumulateddepreciation.” The book value of the property and equipment is $921,027,000.19. The word “” means that RadioShack is presenting its property, plant, and equipmentafter deducting accumulated depreciation to date.20. Apple’s long-term assets discussed in this chapter are: Property, plant, and equipment, ;Goodwill; Acquired intangible assets, .QUICK STUDIESQuick Study 10-1 (10 minutes)Recorded cost = $350,000 + $10,000 + $4,000 + $21,000 = $385,000 Note: The $4,200 repair charge is an expense because it is not a normal and reasonable expenditure necessary to get the asset in place and ready for its intended use.Quick Study 10-2 (10 minutes)1. The main difference between plant assets and current assets is thatcurrent assets are consumed or converted into cash within a short period of time, while plant assets have a useful life of more than one accounting period.2. The main difference between plant assets and inventory is thatinventory is held for resale and plant assets are not.3. The main difference between plant assets and long-term investmentsis that plant assets are used in the primary operation of the business and investments are not.Quick Study 10-3 (10 minutes)Straight-line depreciation($32,500 - $2,500) / 4 years = $7,500 depreciation per yearQuick Study 10-4 (10 minutes)Units-of-production depreciation($32,500 - $2,500) / 200 concerts = $ 150 depreciation per concertx 47 concerts in 2009$7,050 depreciation in 2009Quick Study 10-5 (10 minutes)$32,500 Cost- 7,500 Accumulated depreciation (first year)25,000 Book value at point of revision- 2,500 Salvage value22,500 Remaining depreciable cost÷ 2 Years of life remaining$11,250 Depreciation per year for years 2 and 3Quick Study 10-6 (10 minutes)Note: Double-declining-balance rate = (100% / 8 years) x 2 = 25%First year:$1,200,000 x 25% = $300,000Second year:($1,200,000 - $300,000) x 25% = $225,000Third year:($1,200,000 - $300,000 - $225,000) x 25% = $168,750** Total accumulated depreciation of $693,750 ($300,000 + $225,000 + $168,750)does not exceed the depreciable cost of $1,100,000 ($1,200,000 - $100,000).Quick Study 10-7 (10 minutes)1. (a) Capital expenditure(b) Revenue expenditure(c) Revenue expenditure(d) Capital expenditure2. (a) Equipment ................................................................ 40,000Cash .................................................................. 40,000 To record replacement of pressor.(d) Building .................................................................... 225,000Cash .................................................................. 225,000 To record addition to building.Quick Study 10-8 (15 minutes) Book value of old machine = $92,500 - $54,000 = $38,5001. Cash ................................................................................. 42,000Accumulated depreciation ............................................ 54,000Equipment ................................................................92,500 Gain on sale of equipment* ....................................3,500 To record the sale of equipment.*(Gain = $42,000 - $38,500)2. Cash ................................................................................. 38,500Accumulated depreciation ............................................ 54,000Equipment ................................................................92,500 To record the sale of equipment.3. Cash ................................................................................. 31,000Accumulated depreciation ............................................ 54,000Loss on sale of equipment ............................................ 7,500Equipment ................................................................92,500 To record the sale of equipment.*(Loss = $31,000 - $38,500)Quick Study 10-9 (10 minutes) 1. Ore Mine .......................................................................... 6,800,000 Cash .......................................................................... 6,800,000 To record cost of ore mine. ($6,300,000 + $500,000)2. Depletion per unit = = $5.90 per tonDepletion Expense —Ore Mine ...................................... 737,500 Accumulated Depletion —Ore Mine ....................... 737,500 To record depletion of ore mine (125,000 x $5.90).Quick Study 10-10 (10 minutes) Intangible Assets: b) Trademark c) Leasehold f) Copyright g) Franchise Natural Resources: a) Oil well d) Gold mine h) Timberland Note: Building is reported under plant assets.$6,800,000 - $900,000 1,000,000 tons。