ACCT. Chapter 9 (quiz 8)

A company purchases a coal mine for $1,000,000. It estimates that the mine contains 5,000,000 tons of coal and has a five-year life with no salvage value. If the company extracts and sells 800,000 tons during the first year, how much accumulated depletion should be recorded? A.$80,000 B.$100,000 C.$128,000 D.$160,000

$160,000

Focal Point Engineering purchased a trademark at the beginning of 2017 for $200,000. Although the trademark's legal life is 20 years, economic benefits were expected for only 10 years. Also, during 2017, the company incurred research and development costs of $200,000. The book value of the trademarks at December 31, 2017, is

$180,000

On January 1, a company vehicle with a useful life of eight years and a residual value of $1,000 was purchased for $25,000. What is the depreciation expense in year 3 under straight-line depreciation?

$3,000

On January 1, a company vehicle with a useful life of eight years and a residual value of $1,000 was purchased for $25,000. What is the depreciation expense in year 1 using the double-declining-balance method?

$6,250

Elway Company purchases land for $85,000 cash. Elway assumes $2,500 in property taxes due on the land. The title and attorney fees totaled $1,000. Elway has the land graded for $2,200. They paid $10,000 for paving of a parking lot. What amount does Elway record as the cost for the land?

$90,700

Which of the following statements is not true about goodwill?

It should be expensed in the year acquired

Which of the following is not a capital expenditure?

Painting the office walls

The exclusive right to reproduce and sell a literary, artistic, or musical work is called a A.license. B.copyright. C.patent. D.franchise.

copyright

An asset that costs $7,000 and has accumulated depreciation of $5,200 is sold for $1,000. The ensuing journal entry would include a

debit to Loss on Sale of Asset for $800

The cost of tearing down a building situated on land just purchased should be

debited to the Land account