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Chapter 8: Accounting for Long- Term Assets

Financial & Managerial Accounting
Pages: 356 - 445

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141 Questions for Chapter 8: Accounting for Long- Term Assets

  1. Question: What is the process of allocating the cost of natural resources to expense as they are used?

    Found on Page 386
  2. Question: Perez Company acquires an ore mine at a cost of $1,400,000. It incurs additional costs of $400,000 to access the mine, which is estimated to hold 1,000,000 tons of ore. The estimated value of the land after the ore is removed is $200,000.

    Found on Page 387
  3. The following legal claim exist for Huprey Co. Identify the accounting treatment for each claim as to either

    Found on Page 429
  4. Question: Is the declining-balance method an acceptable way to compute depletion of natural resources? Explain.

    Found on Page 386
  5. Question: Identify the following assets a thorough I as reported on the balance sheet as intangible assets (IA), natural resources (NR), or other (O).

    Found on Page 388
  6. Question: What are the characteristics of an intangible asset?

    Found on Page 386
  7. The payroll records of Speedy Software show the following information about Marsha Gottschalk, an employee, for the weekly pay period ending September 30, 2017. Gottschalk is single and claims one allowance. Compute her Social Security tax (6.2%), Medicare tax (1.45%), federal income tax withholding, state income tax (1.0%), and net pay for the current pay period. (Use the withholding table in Exhibit 9A.6 and round tax amounts to the nearest cent.)

    Found on Page 430
  8. Question: On January 4 of this year, Diaz Boutique incurs a $105,000 cost to modernize its store. Improvements include new floors, ceilings, wiring, and wall coverings. These improvements are estimated to yield benefits for 10 years. Diaz leases its store and has eight years remaining on the lease. Prepare the entry to record (1) the cost of modernization and (2) amortization at the end of this current year.

    Found on Page 388
  9. Question: What general procedures are applied in accounting for the acquisition and potential cost allocation of intangible assets?

    Found on Page 386
  10. Sera Corporation has made and recorded its quarterly income tax payments. After a final review of taxes for the year, the company identifies an additional $40,000 of income tax expense that should be recorded. A portion of this additional expense, $6,000, is deferred for payment in future years. Record Sera’s yearend adjusting entry for income tax expense.

    Found on Page 430

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