Chapter 10

Chapter 010 Plant Assets, Natural Resources and Intangibles

Summary of Questions by Difficulty Level (DL) and Learning Objective (LO)

True/False

Item DL LO Item DL LO Item DL LO

1. Easy C1 23. Med A2 45. Hard P3

2. Med C1 24. Med A2 46. Easy P4

3. Med C1 25. Hard A2 47. Easy P4

4. Hard C1 26. Hard A2 48. Hard P4

5. Easy C2 27. Easy P1 49. Easy P4

6. Med C2 28. Easy P1 50. Med P4

7. Med C2 29. Med P1 51. Hard P4

8. Med C2 30. Med P1 52. Easy P5

9. Med C2 31. Med P1 53. Easy P5

10. Med C2 32. Med P1 54. Med P5

11. Easy C3 33. Med P1 55. Med P5

12. Med C3 34. Easy P2 56. Med P5

13. Med C3 35. Easy P2 57. Med P5

14. Med C3 36. Med P2 58. Easy P6

15. Med C3 37. Med P2 59. Easy P6

16. Hard C3 38. Hard P2 60. Easy P6

17. Easy A1 39. Med P2 61. Med P6

18. Med A1 40. Easy P3 62. Med P6

19. Med A1 41. Easy P3 63. Med P6

20. Med A1 42. Easy P3 64. Med P6

21. Med A1 43. Med P3 65. Med P6

22. Easy A2 44. Med P3

10-1


Multiple Choice


66. Easy C1 91. Med A2 116. Hard P4

67. Easy C1 92. Hard A2 117. Hard P4

68. Med C1 93. Hard A2 118. Easy P4



71. Med C2 96. Med P1 121. Easy P4

72. Med C2 97. Hard P1 122. Easy P5



75. Easy C3 100. Easy P2 125. Med P5

76. Med C3 101. Easy P2 126. Easy P6

77. Hard C3 102. Easy P2 127. Med P6

78. Hard C3 103. Med P2 128. Med P6

79. Hard C3 104. Med P2 129. Med P6

80. Med C3,P2 105. Med P2 130. Med P6

81. Hard C3,P2 106. Hard P2 131. Med P6



84. Hard C3,P2 109. Easy P3 134. Med P7

85. Hard C3,P2 110. Easy P3 135 Hard P7

86. Med A1 111. Med P3 136. Hard P7

87. Hard A1 112. Med P3

88. Hard A1 113. Hard P3

89. Med A2 114. Hard P4

90. Med A2 115. Hard P4

10-2


Matching


137. Med C2,C3,A2,P2,P3,P6

138. Med C1,C2,P1,P3,P5,P6

Short Essay


139. Med C1 144. Med A1 148. Med P3

140. Med C2 145. Med A2 149. Hard P4

141. Med C2 146. Med P1 150. Med P5

142. Hard C3 147. Hard P2 151. Med P6

143. Hard C3 152. Med

Problems


153. Med C3 172. Med P1 191. Med P4

154. Med C3 173. Med P1 192. Med P4

155. Med C3 174. Med P1 193. Med P4

156. Med C3 175. Med P1 194. Med P4

157. Med C3 176. Med P1 195. Easy P5

158. Hard C3,P2 177. Med P1 196. Easy P5

159. Hard C3,P2 178. Med P1 197. Med P5

160. Hard C3,P2 179. Hard P1 198. Easy P6

161. Hard C3,P2 180. Easy P2 199. Easy P6

162. Hard C3,P2 181. Easy P2 200. Easy P6

163. Med C3,P3 182. Easy P2 201. Hard P7

164. Med C3,P4 183. Med P2 202. Med P7

165. Med C3,P4 184. Med P2 203. Med P7

166. Med C3,P4 185. Med P2 204. Med P7

167. Med C3,P7 186. Med P2 205. Med P7

168. Easy A2 187. Med P2,P4 206. Med P7

169. Med A2 188. Easy P3 207. Med P7

170. Med A2 189. Med P3 208. Med P7

171. Med P1 190. Med P4

10-3


Completion Problems


209. Med C1 216. Easy A1 223. Med P3

210. Easy C2 217. Med A2 224. Med P3

211. Easy C2 218. Easy P1 225. Med P3

212. Easy C2 219. Easy P2 226. Med P3

213. Easy C2 220. Easy P2 227. Med P4

214. Med C3 221. Easy P2 228. Easy P5

215. Med C3 221. Med P3 229. Easy P6

Problems


230. Easy P1,P5,P6

232. Med P5,P2 234. Med A2

231. Med P2 233. Med P6

10-4


True / False Questions

1. Plant assets are assets held for sale. FALSE

AACSB: CommunicationsAICPA BB: IndustryAICPA FN: Decision MakingDifficulty: EasyLearning Objective: C1

2. Plant assets refer to intangible assets that are used in the operations of a business. FALSE

AACSB: CommunicationsAICPA BB: IndustryAICPA FN: Decision MakingDifficulty: MediumLearning Objective: C1

3. Plant assets are used in operations and have useful lives that extend over more than one accounting period. TRUE


4. Land held for future expansion is an intangible asset. FALSE

AACSB: CommunicationsAICPA BB: IndustryAICPA FN: Decision MakingDifficulty: HardLearning Objective: C1

10-5


5. Depreciation is the process of allocating the cost of a plant asset to expense in the accounting periods benefiting from its use. TRUE


6. Salvage value is an estimate of an asset's value at the end of its benefit period. TRUE


7. Inadequacy refers to the insufficient capacity of a company's plant assets to meet the company's growing productive demands. TRUE


8. Depreciation should be recorded on the date an asset is purchased. FALSE

AACSB: CommunicationsAICPA BB: IndustryAICPA FN: MeasurementDifficulty: MediumLearning Objective: C2

10-6


9. Depreciation measures the actual decline in market value of an asset. FALSE


10. A plant asset's useful life might not be the same as its productive life. TRUE


11. It is not necessary to report both the cost and the accumulated depreciation of plant assets in the financial statements. FALSE

AACSB: CommunicationsAICPA BB: IndustryAICPA FN: MeasurementDifficulty: EasyLearning Objective: C3

12. Depreciation expense is calculated using estimates of an asset's salvage value and useful life. TRUE


10-7


13. Accumulated depreciation represents funds set aside to buy new assets when the assets currently owned are replaced. FALSE


14. When an asset is purchased (or disposed of) at a time other than the beginning or the end of an accounting period, depreciation is recorded for part of a year so that the year of purchase or the year of disposal is charged with its share of the asset's depreciation. TRUE


15. Revising an estimate of the useful life or salvage value of a plant asset is referred to as a change in accounting estimate, and is reflected in the past, current, and future financial statements. FALSE


16. The going concern assumption supports the reporting of plant assets at book value rather than market value. TRUE

AACSB: CommunicationsAICPA BB: IndustryAICPA FN: MeasurementDifficulty: HardLearning Objective: C2

10-8


17. Total depreciation expense over an asset's useful life will be identical under all methods of depreciation. TRUE

AACSB: CommunicationsAICPA BB: IndustryAICPA FN: MeasurementDifficulty: EasyLearning Objective: A1

18. Financial accounting and tax accounting require the same recordkeeping and there should be no difference in results between the two accounting systems. FALSE

AACSB: CommunicationsAICPA BB: IndustryAICPA FN: MeasurementDifficulty: MediumLearning Objective: A1

19. Most companies use accelerated depreciation for tax purposes because it reduces taxable income due to higher depreciation expense in the early years of an asset's life. TRUE


20. The book value of an asset when using double-declining-balance depreciation is always greater than the book value from using straight-line depreciation, except at the beginning and the end of the asset's useful life, when it is the same. FALSE

AACSB: Reflective ThinkingAICPA BB: IndustryAICPA FN: MeasurementDifficulty: MediumLearning Objective: A1

10-9


21. The modified accelerated cost recovery system (MACRS) is a depreciation method used for tax reporting. TRUE

AACSB: CommunicationsAICPA BB: Industry, LegalAICPA FN: MeasurementDifficulty: MediumLearning Objective: A1

22. Decision makers and other users of financial statements are especially interested in evaluating a company's ability to use its assets in generating sales. TRUE

AACSB: AnalyticAICPA BB: IndustryAICPA FN: Risk AnalysisDifficulty: EasyLearning Objective: A2

23. Asset turnover is computed by dividing average total assets by cost of sales. FALSE

AACSB: AnalyticAICPA BB: IndustryAICPA FN: Risk AnalysisDifficulty: MediumLearning Objective: A2

24. Capital intensive companies have a relatively large amount invested in assets to generate a given level of sales. TRUE


10-10


25. Coors reported net sales of $2,463 million and average total assets of $1,546 million. Its total asset turnover equals 1.59. TRUE

$2,463/$1,546 = 1.59

AACSB: AnalyticAICPA BB: IndustryAICPA FN: Risk AnalysisDifficulty: HardLearning Objective: A2

26. Anheiser-Busch reported average total assets of $10,965 million and net sales of $11,430 million. Its total asset turnover equals .96. FALSE

$11,430/$10,965 = 1.04


27. An asset's cost includes all normal and reasonable expenditures necessary to get the asset in place and ready for its intended use. TRUE

AACSB: CommunicationsAICPA BB: IndustryAICPA FN: MeasurementDifficulty: EasyLearning Objective: P1

10-11


28. If a machine is damaged during unpacking, the repairs are added to its cost. FALSE


29. An expenditure must be normal, reasonable, and necessary in preparing an asset for its intended use to be charged to and reported as part of the cost of a plant asset. TRUE

AACSB: CommunicationsAICPA BB: IndustryAICPA FN: MeasurementDifficulty: MediumLearning Objective: P1

30. The purchase of a property that included land, building, and improvements is called a lump-sum purchase. TRUE

AACSB: CommunicationsAICPA BB: IndustryAICPA FN: Decision MakingDifficulty: MediumLearning Objective: P1

31. When a company constructs a building, the cost of the building includes materials and labor, design fees, building permits, and insurance during construction. TRUE


10-12


32. Land is not subject to depreciation because it has an unlimited life. This means that items which increase the usefulness of the land such as parking lots are not depreciated. FALSE


33. The cost of fees for insuring the title and any accrued property taxes are included in the cost of land. TRUE


34. The most frequently used method of depreciation is the straight-line method. TRUE


35. Total asset cost plus depreciation expense equals book value. FALSE


10-13


36. The units-of-production method of depreciation charges a varying amount of expense for each period of an asset's useful life depending on its usage. TRUE


37. An accelerated depreciation method yields smaller depreciation expense in the early years of an asset's life and larger depreciation expense in later years. FALSE


38. The double-declining balance method is applied by (1) computing the asset's straight-line depreciation rate, (2) doubling it, (3) subtracting salvage value from cost, and (4) multiplying the rate times the net value. FALSE

AACSB: CommunicationsAICPA BB: IndustryAICPA FN: MeasurementDifficulty: HardLearning Objective: P2

10-14


39. A company purchased a plant asset for $45,000. The asset has an estimated salvage value of $6,000, and an estimated useful life of 10 years. The annual depreciation expense using the straight-line method is $3,900 per year. TRUE

($45,000 - $6,000)/10 = $3,900

AACSB: AnalyticAICPA BB: IndustryAICPA FN: MeasurementDifficulty: MediumLearning Objective: P2

40. Revenue expenditures are additional costs of plant assets that materially increase the assets' life or productive capabilities. FALSE


41. Ordinary repairs are expenditures that keep assets in normal, good operating condition. TRUE


42. Extraordinary repairs are expenditures extending the asset's useful life beyond its original estimate, and are capital expenditures because they benefit future periods. TRUE


10-15


43. Capital expenditures are also called balance sheet expenditures. TRUE


44. Betterments are a type of capital expenditure. TRUE


45. Treating capital expenditures of a small dollar amount as revenue expenditures is likely to mislead users of financial statements. FALSE


46. Plant assets can be disposed of by discarding, selling, or exchanging them. TRUE

AACSB: CommunicationsAICPA BB: IndustryAICPA FN: Decision MakingDifficulty: EasyLearning Objective: P4

10-16


47. The first step in accounting for an asset disposal is to calculate the gain or loss on disposal. FALSE


48. Accounting for the exchange of assets depends on whether the transaction has commercial substance; commercial substance implies that it alters the company's future cash flows. TRUE


49. If an asset is sold above its book value, the selling company records a loss. FALSE


50. Gain or loss on the disposal of assets is determined by comparing the disposed asset's book value to the market value of any assets received. TRUE


10-17


51. A loss on disposal of a plant asset can only occur if the cash proceeds received from the asset sale is less than the asset's book value. TRUE


52. Natural resources are assets that include standing timber, mineral deposits, and oil and gas fields. TRUE


53. Amortization is the process of allocating the cost of natural resources to periods when they are consumed. FALSE


54. Natural resources are often called wasting assets because they are physically consumed when used. TRUE


10-18


55. Natural resources are reported on the balance sheet at cost plus accumulated depletion. FALSE


56. When the usefulness of plant assets used to extract natural resources is directly related to the depletion of a natural resource, their costs are depreciated using the units-of-production method of depreciation, as long as the assets will not be moved to and used at another site when extraction of the natural resources is complete. TRUE


57. An ore deposit costing $800,000 is expected to produce 1,600,000 tons of ore. A total of 70,000 tons are mined and sold in the current year. The depletion expense for the current year is $35,000. TRUE

($800,000/$1,600,000) x $70,000 = $35,000


10-19


58. The cost of an intangible asset must be systematically allocated to depreciation expense over its estimated useful life. FALSE


59. Intangible assets are certain nonphysical assets used in operations that confer on their owners long-term rights, privileges, or competitive advantage. TRUE

AACSB: CommunicationsAICPA BB: Industry, LegalAICPA FN: Decision MakingDifficulty: EasyLearning Objective: P6

60. Goodwill is the amount by which a company's value exceeds the value of its individual assets and liabilities. TRUE


61. The cost of an intangible is systematically allocated to expense over its estimated useful life through the process of depletion. FALSE


10-20


62. Since goodwill is an intangible, it is amortized each year using the straight-line method, the same as other intangibles are amortized. FALSE

AACSB: CommunicationsAICPA BB: Industry, LegalAICPA FN: MeasurementDifficulty: MediumLearning Objective: P6

63. A patent is an exclusive right granted to its owner to manufacture and sell a patented device or to use a process for 20 years. TRUE

AACSB: CommunicationsAICPA BB: Industry, LegalAICPA FN: Decision MakingDifficulty: MediumLearning Objective: P6

64. A copyright gives its owner the exclusive right to publish and sell a musical, literary, or artistic work during the life of the creator plus 17 years. FALSE


65. The cost of developing, maintaining, or enhancing the value of a trademark is always added to the value of the asset when incurred. FALSE


10-21


Multiple Choice Questions

66. Plant assets are: A. Tangible assets used in the operation of a business that have a useful life of more than one accounting period.B. Current assets.C. Held for sale.D. Intangible assets used in the operations of a business that have a useful life of more than one accounting period.E. Tangible assets used in the operation of business that have a useful life of less than one accounting period.

AACSB: Reflective ThinkingAICPA BB: IndustryAICPA FN: Decision MakingDifficulty: EasyLearning Objective: C1

67. A main accounting issue for plant assets is: A. Computing the cost of the plant assets.B. Matching the costs of plant assets against revenues for the periods they benefit.C. Accounting for repairs and improvements to plant assets.D. The disposal of plant assets.E. All of these.


10-22


68. Plant assets are: A. Current assets.B. Used in operations.C. Natural resources.D. Long-term investments.E. Intangible.

AACSB: Reflective ThinkingAICPA BB: IndustryAICPA FN: Decision MakingDifficulty: MediumLearning Objective: C1

69. The relevant factor(s) in computing depreciation include: A. Cost.B. Salvage value.C. Useful life.D. Depreciation method.E. All of these.


70. Salvage value is: A. Also called residual value.B. Also called scrap value.C. An estimate of the asset's value at the end of its benefit period.D. A factor relevant to determining depreciation.E. All of these.


10-23


71. Depreciation: A. Measures the decline in market value of an asset.B. Measures physical deterioration of an asset.C. Is the process of allocating to expense the cost of a plant asset.D. Is an outflow of cash from the use of a plant asset.E. Is applied to land.


72. The useful life of a plant asset is: A. The length of time it is productively used in a company's operations.B. Never related to its physical life.C. Its productive life, but not to exceed one year.D. Determined by the FASB.E. Determined by law.


73. Inadequacy refers to: A. The insufficient capacity of a company's plant assets to meet the company's growing production demands.B. An asset that is worn out.C. An asset that is no longer useful in producing goods and services.D. The condition where the salvage value is too small to replace the asset.E. The condition where the asset's salvage value is less than its cost.

AACSB: Reflective ThinkingAICPA BB: IndustryAICPA FN: Decision MakingDifficulty: HardLearning Objective: C2

10-24


74. Obsolescence: A. Occurs when an asset is at the end of its useful life.B. Refers to a plant asset that is no longer useful in producing goods and services.C. Refers to the insufficient capacity of a company's plant assets to meet the company's productive demands.D. Occurs when an asset's salvage value is less than its replacement cost.E. Does not affect plant assets.


75. Once the estimated depreciation expense for an asset is calculated: A. It cannot be changed due to the historical cost principle.B. It may be revised based on new information.C. Any changes are accumulated and recognized when the asset is sold.D. The estimate itself cannot be changed; however, new information should be disclosed in financial statement footnotes.E. It cannot be changed due to the consistency principle.


10-25


76. A machine originally had an estimated useful life of 5 years, but after 3 complete years, it was decided that the original estimate of useful life should have been 10 years. At that point the remaining cost to be depreciated should be allocated over the remaining: A. 2 years.B. 5 years.C. 7 years.D. 8 years.E. 10 years.

10 year revised life - 3 years depreciated = 7 remaining

AACSB: AnalyticAICPA BB: IndustryAICPA FN: MeasurementDifficulty: MediumLearning Objective: C3

77. A change in an accounting estimate is: A. Reflected in past financial statements.B. Reflected in future financial statements and also requires modification of past statements.C. A change in a calculated amount that is included in current and future years' financial statements as a result of new information or subsequent developments and from better insight or improved judgment.D. Not allowed under current accounting rules.E. Considered an error in the financial statements.


10-26


78. When originally purchased, a vehicle had an estimated useful life of 8 years. The vehicle cost $23,000 and its estimated salvage value is $1,500. After 4 years of straight-line depreciation, the asset's total estimated useful life was revised from 8 years to 6 years and there was no change in the estimated salvage value. The depreciation expense in year 5 equals: A. $ 5,375.00.B. $ 2,687.50.C. $ 5,543.75.D. $10,750.00.E. $ 2,856.25.

Accumulated depreciation, end of year 4: [($23,000 - $1,500)/8 years] x 4 years = $10,750Depreciation, year 5: ($23,000 - $10,750 - $1,500)/2 years = $5,375

AACSB: AnalyticAICPA BB: IndustryAICPA FN: MeasurementDifficulty: HardLearning Objective: C3

79. A company used straight-line depreciation for an item of equipment that cost $12,000, had a salvage value of $2,000, and had a five-year useful life. After depreciating the asset for three complete years, the salvage value was reduced to $1,200 and its total useful life was increased from 5 years to 6 years. Determine the amount of depreciation to be charged against the machine during each of the remaining years of its useful life: A. $1,000.B. $1,800.C. $1,467.D. $1,600.E. $2,160.

Accumulated depreciation, end of year 3: [($12,000 - $2,000)/5 years] x 3 years = $6,000Depreciation, years 4 through 6: ($12,000 - $6,000 - $1,200)/3 years = $1,600

AACSB: AnalyticAICPA BB: IndustryAICPA FN: MeasurementDifficulty: HardLearning Objective: C3

10-27


80. Nelson Company purchased equipment on July 1 for $27,500 and decided to depreciate the equipment on the straight-line method over its useful life of five years. Assuming the equipment's salvage value is $3,500, the amount of monthly depreciation expense Nelson should recognize is: A. $2,400B. $ 200C. $4,800D. $ 400E. $ 450

(27,500 - 3,500) / 60 months = $400

AACSB: AnalyticAICPA BB: IndustryAICPA FN: MeasurementDifficulty: MediumLearning Objective: C3Learning Objective: P2

10-28


81. Thomas Enterprises purchased a depreciable asset on October 1, 2008 at a cost of $100,000. The asset is expected to have a salvage value of $15,000 at the end of its five-year useful life. If the asset is depreciated on the double-declining-balance method, the asset's book value on December 31, 2010 will be: A. $27,540B. $21,600C. $32,400D. $18,360E. $90,000

Accordingly, the asset's book value at the end of 2010 would be $32,400.BOY BV = Beginning of Year Book ValueDB Rate = Declining Balance Rate of Depreciation (100%/5 x 2)EOY BV = End of Year Book Value

AACSB: AnalyticAICPA BB: IndustryAICPA FN: MeasurementDifficulty: HardLearning Objective: C3Learning Objective: P2

10-29


82. Based on the information provided in question #81, Thomas Enterprises should recognize what amount of depreciation expense in 2012? A. $4,440B. $6,610C. $1,524D. $5,520E. $2,000

See the solution to question #81. Based on that information, depreciation expense for 2012 would be $4,440.


83. Lomax Enterprises purchased a depreciable asset for $22,000 on March 1, 2008. The asset will be depreciated using the straight-line method over its four-year useful life. Assuming the asset's salvage value is $2,000, what will be the amount of accumulated depreciation on this asset on December 31, 2011? A. $5,000.00B. $4,166.67C. $16,666.68D. $20,000.00E. $19,166.67

[(22,000 - 2,000) / 4] x 10/12 = $4,166.67 of accumulated depreciation at the end of 2008. Since annual depreciation expense is $5,000 [(22,000 - 2,000) / 4], accumulated depreciation on December 31, 2011 would be $19,166.67 ($5,000 per year for three years + $4,166.67 in the partial year of 2008).


10-30


84. Based on the information provided in question # 83, Lomax Enterprises should recognize depreciation expense in 2011 in the amount of: A. $19,166.67B. $5,000.00C. $5,500.00D. $20,000.00E. $4,166.67

(22,000 - 2,000) / 4 years = 5,000 of depreciation expense per full year


10-31


85. The following information is available on a depreciable asset owned by First Bank & Trust:

The asset's book value is $70,000 on October 1, 2010. On that date, management determines that the asset's salvage value should be $5,000 rather than the original estimate of $10,000. Based on this information, the amount of depreciation expense the company should recognize during the last three months of 2010 would be: A. $2,187.50B. $1,718.75C. $2,031.25D. $2,321.43E. $1,964.29

The asset's book value is $70,000 after having been depreciated for two full years. To calculate the new rate of depreciation, subtract the revised salvage value of $5,000 from the current book value of $70,000, yielding $65,000 of revised remaining depreciable cost. Since that amount is to be recognized over the remaining eight years of useful life, depreciation expense for the last quarter of 2010 would be $2,031.25 [(65,000/8) x 3/12 = $2,031.25].


10-32


86. Many companies use an accelerated depreciation method because: A. It is required by the tax code.B. It is required by financial reporting rules.C. It yields larger depreciation expense in the early years of an asset's life.D. It yields a higher income in the early years of the asset's useful life.E. The results are identical to straight-line depreciation.

AACSB: AnalyticAICPA BB: IndustryAICPA FN: MeasurementDifficulty: MediumLearning Objective: A1

87. The modified accelerated cost recovery system (MACRS): A. Is included in the U.S. federal income tax rules for depreciating assets.B. Is an out-dated system that is no longer used by companies.C. Is required for financial reporting.D. Is identical to units of production depreciation.E. All of these.

AACSB: CommunicationsAICPA BB: Industry, LegalAICPA FN: MeasurementDifficulty: HardLearning Objective: A1

88. The straight-line depreciation method and the double-declining-balance depreciation method: A. Produce the same total depreciation over an asset's useful life.B. Produce the same depreciation expense each year.C. Produce the same book value each year.D. Are acceptable for tax purposes only.E. Are the only acceptable methods of depreciation for financial reporting.

AACSB: CommunicationsAICPA BB: IndustryAICPA FN: MeasurementDifficulty: HardLearning Objective: A1

10-33


89. Total asset turnover is used to evaluate: A. The efficiency of management's use of assets to generate sales.B. The necessity for asset replacement.C. The number of times operating assets were sold during the year.D. The cash flows used to acquire assets.E. The relation between asset cost and book value.

AACSB: CommunicationsAICPA BB: IndustryAICPA FN: Risk AnalysisDifficulty: MediumLearning Objective: A2

90. A total asset turnover ratio of 3.5 indicates that: A. For every $1 in sales, the firm acquired $3.50 in assets during the period.B. For every $1 in assets, the firm produced $3.50 in net sales during the period.C. For every $1 in assets, the firm earned gross profit of $3.50 during the period.D. For every $1 in assets, the firm earned $3.50 in net income.E. For every $1 in assets, the firm paid $3.50 in expenses during the period.


91. Total asset turnover is calculated by dividing: A. Gross profit by average total assets.B. Average total assets by gross profit.C. Net sales by average total assets.D. Average total assets by net sales.E. Net assets by total assets.


10-34


92. A company had average total assets of $897,000. Its gross sales were $1,090,000 and its net sales were $1,000,000. The company's total asset turnover equals: A. 0.82.B. 0.90.C. 1.09.D. 1.11.E. 1.26.

$1,000,000/$897,000 = 1.11


93. Dell had net sales of $35,404 million. Its average total assets for the period were $14,502 million. Dell's total asset turnover equals: A. 0.40.B. 0.35.C. 1.45.D. 2.44.E. 3.50.

$35,404/$14,502 = 2.44


10-35


94. Land improvements are: A. Assets that increase the usefulness of land, and like land, are not depreciated.B. Assets that increase the usefulness of land, but that have a limited useful life and are subject to depreciation.C. Included in the cost of the land account.D. Expensed in the period incurred.E. Also called basket purchases.


95. Plant assets include: A. Land.B. Land improvements.C. Buildings.D. Machinery and equipment.E. All of these.


96. The cost of land can include: A. Purchase price.B. Assessments by local governments.C. Costs of removing existing structures.D. Fees for insuring the title.E. All of these.


10-36


97. A company paid $150,000, plus a 6% commission and $4,000 in closing costs for a property. The property included land appraised at $87,500, land improvements appraised at $35,000, and a building appraised at $52,500. What should be the allocation of this property's costs in the company's accounting records? A. Land $75,000; Land Improvements, $30,000; Building, $45,000.B. Land $75,000; Land Improvements, $30,800; Building, $46,200.C. Land $81,500; Land Improvements, $32,600; Building, $48,900.D. Land $79,500; Land Improvements, $32,600; Building, $47,700.E. Land $87,500; Land Improvements; $35,000; Building; $52,500.

Total cost to allocate = $150,000 + 9,000 + 4,000 = $163,000

AACSB: AnalyticAICPA BB: IndustryAICPA FN: MeasurementDifficulty: HardLearning Objective: P1

10-37


98. A company purchased property for a building site. The costs associated with the property were:

What portion of these costs should be allocated to the cost of the land and what portion should be allocated to the cost of the new building? A. $175,800 to Land; $18,800 to Building.B. $190,000 to Land; $3,800 to Building.C. $190,800 to Land; $1,000 to Building.D. $192,800 to Land; $0 to Building.E. $193,800 to Land; $0 to Building.

Total cost = $175,000 + $15,000 + $800 + $2,000 + $1,000 = $193,800The entire amount of the cost should be allocated to the land, since the new building is not yet constructed.


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99. A company purchased property for $100,000. The property included a building, a parking lot, and land. The building was appraised at $62,000; the land at $45,000, and the parking lot at $18,000. Land should be recorded in the accounting records with an allocated cost of: A. $ 0.B. $ 36,000.C. $ 42,000.D. $ 45,000.E. $100,000.

$100,000 x $45,000/($62,000 + $45,000 + $18,000) = $36,000


100. The formula for computing annual straight-line depreciation is: A. Depreciable cost divided by useful life in units.B. Cost plus salvage value divided by the useful life in years.C. Cost less salvage value divided by the useful life in years.D. Cost multiplied by useful life in years.E. Cost divided by useful life in units.


101. The total cost of an asset less its accumulated depreciation is called: A. Historical cost.B. Book value.C. Present value.D. Current (market) value.E. Replacement cost.


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102. A method that charges the same amount of expense to each period of the asset's useful life is called: A. Accelerated depreciation.B. Declining-balance depreciation.C. Straight-line depreciation.D. Units-of-production depreciation.E. Modified accelerated cost recovery system (MACRS) depreciation.


103. A method that allocates an equal portion of the total depreciable cost for a plant asset to each unit produced is called: A. Accelerated depreciation.B. Declining-balance depreciation.C. Straight-line depreciation.D. Units-of-production depreciation.E. Modified accelerated cost recovery system (MACRS) depreciation.


104. A depreciation method in which a plant asset's depreciation expense for a period is determined by applying a constant depreciation rate to the asset's beginning-of-period book value is called: A. Book value depreciation.B. Declining-balance depreciation.C. Straight-line depreciation.D. Units-of-production depreciation.E. Modified accelerated cost recovery system (MACRS) depreciation.


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105. A depreciation method that produces larger depreciation expense during the early years of an asset's life and smaller expense in the later years is a (an): A. Accelerated depreciation method.B. Book value depreciation method.C. Straight-line depreciation method.D. Units-of-production depreciation method.E. Unrealized depreciation method.


106. A company purchased a delivery van for $23,000 with a salvage value of $3,000 on September 1, 2008. It has an estimated useful life of 5 years. Using the straight-line method, how much depreciation expense should the company recognize on December 31, 2008? A. $1,000.B. $1,333.C. $1,533.D. $4,000.E. $4,600.

($23,000 - $3,000)/5 x 4/12 = $1,333


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107. A company purchased a cash register on January 1 for $5,400. This register has a useful life of 10 years and a salvage value of $400. What would be the depreciation expense for the second-year of its useful life using the double-declining-balance method? A. $ 500.B. $ 800.C. $ 864.D. $1,000.E. $1,080.

Year 1: $5,400 x 2 x 10% = $1,080Year 2: ($5,400 - $1,080) x 2 x 10% = $864


108. A company purchased a rope braiding machine for $190,000. The machine has a useful life of 8 years and a residual value of $10,000. It is estimated that the machine could produce 750,000 units of climbing rope over its useful life. In the first year, 105,000 units were produced. In the second year, production increased to 109,000 units. Using the units-of-production method, what is the amount of depreciation that should be recorded for the second year? A. $25,200.B. $26,160.C. $26,660.D. $27,613.E. $53,160.

109,000 units x [($190,000 - $10,000)/750,000 units] = $26,160


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109. Revenue expenditures: A. Are additional costs of plant assets that do not materially increase the asset's life or its productive capabilities.B. Are known as balance sheet expenditures.C. Extend the asset's useful life.D. Substantially benefit future periods.E. Are debited to asset accounts.


110. Another name for a capital expenditure is: A. Revenue expenditure.B. Asset expenditure.C. Long-term expenditure.D. Contributed capital expenditure.E. Balance sheet expenditure.


111. Extraordinary repairs: A. Are revenue expenditures.B. Extend an asset's useful life beyond its original estimate.C. Are credited to accumulated depreciation.D. Are additional costs of plants assets that do not materially increase the asset's life.E. Are expensed as incurred.


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112. Ordinary repairs: A. Are expenditures to keep an asset in normal operating condition.B. Are necessary if an asset is to perform to expectations over its useful life.C. Are treated as expenses.D. Include cleaning, lubricating, and normal adjusting.E. All of these.


113. Betterments: A. Are expenditures making a plant asset more efficient or productive.B. Are also called improvements.C. Do not always increase an asset's life.D. Are capital expenditures.E. All of these.


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114. An asset's book value is $18,000 on June 30, 2008. The asset is being depreciated at an annual rate of $3,000 on the straight-line method. Assuming the asset is sold on December 31, 2009 for $15,000, the company should record: A. A loss on sale of $1,500.B. A gain on sale of $1,500.C. Neither a gain nor a loss is recognized on this type of transaction.D. A gain on sale of $3,000.E. A loss on sale of $3,000.

If the asset's book value is $18,000 on June 30, 2008 and is being depreciated at a rate of $3,000 per year, an additional $4,500 of depreciation expense would be recognized by December 31, 2009. Thus, the asset's book value on that date would be $13,500. If the asset is sold for $15,000, a gain on sale of $1,500 should be recognized.


115. An asset's book value is $36,000 on January 1, 2008. The asset is being depreciated $500 per month using the straight-line method. Assuming the asset is sold on July 1, 2009 for $25,000, the company should record: A. Neither a gain or loss is recognized on this type of transaction.B. A gain on sale of $2,000.C. A loss on sale of $1,000.D. A gain on sale of $1,000.E. A loss on sale of $2,000.

If the asset's book value is $36,000 on January 1, 2008 and is being depreciated $500 per month, $9,000 (18 x $500) of additional depreciation expense would be recognized by July 1, 2009. Thus, the asset's book value on that date would be $27,000. If the asset is sold for $25,000, a loss on sale of $2,000 should be recognized.


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116. Information on a depreciable asset owned by Wilson Engineering is as follows:

If the asset is sold on July 1, 2012 for $20,000, the journal entry to record the sale will include: A. A credit to cash for $20,000.B. A debit to accumulated depreciation for $22,500.C. A debit to loss on sale for $10,000.D. A credit to loss on sale for $10,000.E. A debit to gain on sale for $2,500.

Annual depreciation is $5,000 [(45,000 - 5,000) / 8 years]. On July 1, 2012, the asset will have been depreciated for 4.5 years for a total of $22,500. The resulting book value on that date will be $22,500. The journal entry to record the sale of the asset would be as follows:


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117. Information on a depreciable asset is as follows:

If the asset is sold on January 1, 2011 for $13,000, the journal entry to record the sale will include: A. A credit to gain on sale for $8,000.B. A debit to loss on sale for $2,625.C. A credit to accumulated depreciation for $59,375.D. A debit to loss on sale for $3,042.E. A credit to gain on sale for $4,979.

Therefore, the journal entry to record the sale of the asset would be as follows:

BOY BV = Beginning of the year book valueDB Rate = Declining-balance rate of depreciation (100%/4) x 2EOY BV = End of the year book value


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118. An asset can be disposed of by: A. Discarding it.B. Selling it.C. Exchanging it for another asset.D. Donating it to charity.E. All of these.


119. A company sold a machine that originally cost $100,000 for $60,000 cash. The accumulated depreciation on the machine was $40,000. The company should recognize a: A. $0 gain or loss.B. $20,000 gain.C. $20,000 loss.D. $40,000 loss.E. $60,000 gain.

AACSB: AnalyticAICPA BB: IndustryAICPA FN: MeasurementDifficulty: EasyLearning Objective: P4

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120. A company discarded a display case originally purchased for $8,000. The accumulated depreciation was $7,200. The company should recognize a (an): A. $0 gain or loss.B. $800 loss.C. $800 gain.D. $8,000 loss.E. $7,200 loss.


121. A company had a bulldozer destroyed by fire. The bulldozer originally cost $125,000 with accumulated depreciation of $60,000. The proceeds from the insurance company were $90,000. The company should recognize: A. A loss of $25,000.B. A gain of $25,000.C. A loss of $65,000.D. A gain of $65,000.E. A gain of $90,000.


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122. Natural resources: A. Include standing timber, mineral deposits, and oil and gas fields.B. Are also called wasting assets.C. Are long-term assets.D. Are depleted.E. All of these.


123. Depletion: A. Is the process of allocating the cost of natural resources to periods in which they are consumed.B. Is also called depreciation.C. Is also called amortization.D. Is an unrealized expense reported in equity.E. Is the process of allocating the cost of intangibles to periods in which they are used.


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124. A company purchased a tract of land for its natural resources at a cost of $1,500,000. It expects to mine 2,000,000 tons of ore from this land. The salvage value of the land is expected to be $250,000. The depletion expense per ton of ore is: A. $0.75.B. $0.625.C. $0.875.D. $6.00.E. $8.00.

($1,500,000 - $250,000)/2,000,000 tons = $0.625 per ton


125. A company purchased a mineral deposit for $800,000. It expects this property to produce 1,200,000 tons of ore and to have a salvage value of $50,000. In the current year, the company mined and sold 90,000 tons of ore. Its depletion expense for the current period equals: A. $ 15,000.B. $ 60,000.C. $150,000.D. $ 56,250.E. $139,500.

$90,000 tons x ($800,000 - $50,000/1,200,000) = $56,250


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126. Intangible assets include: A. Patents.B. Copyrights.C. Trademarks.D. Goodwill.E. All of these.


127. Amortization: A. Is the systematic allocation of the cost of an intangible asset to expense over its estimated useful life.B. Is the process of allocating to expense the cost of a plant asset to the accounting periods benefiting from its use.C. Is the process of allocating the cost of natural resources to periods when they are consumed.D. Is an accelerated form of expensing an asset's cost.E. Is also called depletion.


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128. A patent: A. Gives its owner the exclusive right to publish and sell a musical or literary work during the life of the creator plus 70 years.B. Gives its owner an exclusive right to manufacture and sell a patented item or to use a process for 20 years.C. Gives its owner an exclusive right to manufacture and sell a device or to use a process for 50 years.D. Is the amount by which the value of a company exceeds the fair market value of a company's net assets if purchased separately.E. Gives its owner the exclusive right to publish and sell a musical or literary work during the life of the creator plus 17 years.


129. A copyright: A. Gives its owner the exclusive right to publish and sell a musical or literary work during the life of the creator plus 70 years.B. Gives its owner an exclusive right to manufacture and sell a patented item or to use a process for 20 years.C. Gives its owner an exclusive right to manufacture and sell a device or to use a process for 50 years.D. Is the amount by which the value of a company exceeds the fair market value of a company's net assets if purchased separately.E. Gives its owner the exclusive right to publish and sell a musical or literary work during the life of the creator plus 20 years.


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130. A leasehold: A. Is a short-term rental agreement.B. Is the same as a patent.C. Are the rights granted to the lessee by the lessor of a lease.D. Is recorded as revenue expenditure when paid.E. Is an investment asset.


131. Goodwill: A. Is not amortized, but is tested annually for impairment.B. Is amortized using the straight-line method.C. Is amortized using the units-of-production method.D. May be amortized using either the straight-line or units-of-production method.E. Is never amortized or tested for impairment.


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132. A company's old machine that cost $40,000 and had accumulated depreciation of $30,000 was traded in on a new machine having an estimated 20-year life with an invoice price of $50,000. The company also paid $43,000 cash, along with its old machine to acquire the new machine. If this transaction has commercial substance, the new machine should be recorded at: A. $40,000.B. $47,000.C. $50,000.D. $53,000.E. $10,000.

Therefore the loss on the exchange is recognized and the new machine should be recorded at its price of $50,000.


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133. Endor Fishing Company exchanged an old boat for a new one. The old boat had a cost of $260,000 and accumulated depreciation of $200,000. The new boat had an invoice price of $400,000. Endor received a trade in allowance of $100,000 on the old boat, which meant the company paid $300,000 in addition to the old boat to acquire the new boat. If this transaction lacks commercial substance, what amount of gain or loss should be recorded on this exchange? A. $0 gain or loss.B. $40,000 gain.C. $40,000 loss.D. $60,000 lossE. $100,000 loss.

As this transaction lacks commercial substance, the $40,000 gain should not be recognized.


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134. Huffington Company traded in an old delivery truck for a new one. The old truck had a cost of $75,000 and accumulated depreciation of $60,000. The new truck had an invoice price of $125,000. Huffington was given a $12,000 trade-in allowance on the old truck, which meant they paid $113,000 in addition to the old truck to acquire the new truck. If this transaction has commercial substance, what is the recorded value of the new truck? A. $15,000B. $75,000C. $113,000D. $125,000E. $128,000

As the transaction has commercial substance and there is a loss on the exchange, the new asset is recorded at its market value.


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135. A company bought a new display case for $42,000 and was given a trade-in of $2,000 on an old display case, so the company paid $40,000 cash with the trade-in. The old case had an original cost of $37,000 and accumulated depreciation of $34,000. If the transaction has commercial substance, the company should record the new display case at: A. $ 2,000.B. $ 3,000.C. $40,000.D. $42,000.E. $43,000.

Since the transaction has commercial substance, the loss on exchange is recognized and the new display case should be recorded at its $42,000 price.


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136. A company purchased a machine valued at $66,000. It traded in an old machine for a $9,000 trade-in allowance and the company paid $57,000 cash with the trade-in. The old machine cost $44,000 and had accumulated depreciation of $36,000. This transaction has commercial substance. What is the recorded value of the new machine? A. $ 8,000.B. $ 9,000.C. $57,000.D. $65,000.E. $66,000.

Since the transaction has commercial substance, the $1,000 gain is recognized and the new machine is recorded at its market value of $66,000.


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Matching Questions

137. Match each of the following terms with the appropriate definitions.

1. Depletion The process of allocating the cost of natural resources to periods when they are consumed. 1

2. Units-of production method

An expenditure to make a plant asset more efficient or productive. 4

3. Revenue expenditure

Expenditures made to keep a plant asset in normal, good operating condition. 6

4. Betterment

A depreciation method that charges a varying amount to expense for each period of an asset's useful life

depending on its usage. 2

5. Intangible assets

Certain nonphysical assets used in operations that confer on their owners long-term rights, privileges, or

competitive advantages. 5

6. Ordinary repairs

A method that yields larger depreciation expense during the early years of an asset's life and smaller

expense in the later years. 10

7. Goodwill

A change in a financial statement amount that results from new information, subsequent developments, better

insight, or improved judgment. 8 8. Change in accounting estimate

The amount by which the company's value exceeds the value of its individual assets and liabilities. 7

9. Total asset turnover

A measure of a company's ability to use its assets to generate sales. 9

10. Accelerated depreciation

An expenditure reported on the current income statement as an expense because it does not provide a

material benefit in future periods. 3

AACSB: CommunicationsAICPA BB: IndustryAICPA FN: Decision MakingDifficulty: MediumLearning Objective: A2Learning Objective: C2Learning Objective: C3Learning Objective: P2Learning Objective: P3Learning Objective: P6

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138. Match each of the following terms with the appropriate definitions.

1. Patent Major repairs that extend the useful life of a plant asset

beyond its original estimate. 4

2. Obsolescence

A condition which, because of new inventions and improvements, a plant asset is no longer useful in

producing goods or services with a competitive advantage. 2

3. Amortization The process of allocating the cost of an intangible asset

to expense over its estimated useful life. 3 4. Extraordinary repairs

The process of allocating the cost of natural resources to the periods when they are consumed. 10

5. Land improvements

An estimate of an asset's value at the end its benefit period. 7

6. Book value The total cost of a plant asset less its accumulated

depreciation. 6

7. Salvage value Assets that increase the benefits of land, have a limited

useful life, and are subject to depreciation. 5

8. Copyright

A right granted that gives its owner the exclusive privilege to publish and sell musical, literary, or artistic

work during the life of the creator plus 70 years. 8

9. Inadequacy The insufficient capacity of plant assets to meet the

company's productive demands. 9

10. Depletion An exclusive right granted to its owner to manufacture

and sell an item, or to use a process, for 20 years. 1

AACSB: CommunicationsAICPA BB: IndustryAICPA FN: Decision MakingDifficulty: MediumLearning Objective: C1Learning Objective: C2Learning Objective: P1Learning Objective: P3Learning Objective: P5Learning Objective: P6

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Short Answer Questions

139. Define plant assets and identify the four primary issues in accounting for them.

Plant assets are tangible assets used in the operations of a company that have a useful life of more than one accounting period. The four main accounting issues include (1) computing their costs, (2) allocating their costs against revenues during the periods they benefit, (3) accounting for expenditures such as repairs and improvements, (4) and recording their disposal.


140. What is depreciation of plant assets? What are the factors to consider in computing depreciation?

Depreciation is the process of allocating to expense the cost of a plant asset to expense in the accounting periods benefiting from its use. Three factors determine depreciation: cost of the asset, salvage value, and useful life. In addition, the company must determine the depreciation method to use.


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141. What are some of the variables that make a plant asset's useful life difficult to predict?

There are several factors that make it difficult to predict an asset's useful life. A major variable is the wear and tear for the asset's use in operations. Inadequacy, the insufficient capacity of a company's plant assets to meet the company's growing productive demands, is second factor. Obsolescence, the issue of a plant asset that is no longer useful in producing goods and services, is a third factor. Both inadequacy and obsolescence are difficult to predict because the timing of demand changes, new inventions, and improvements is unknown.


142. Explain the purpose of and method of depreciation for partial years.

Partial years' depreciation is often required because assets are bought and sold throughout the year. Depreciation for assets owned for less than one year is commonly calculated as the annual depreciation prorated for the number of months the assets are owned during the year. This is done so that the year of purchase or the year of disposal is charged with its share of the asset's depreciation.


143. Explain the impact, if any, on depreciation when estimates that determine depreciation change.

Depreciation is revised when changes in estimates such as salvage value and useful life occur. If the asset's useful life and/or salvage value changes, the remaining depreciable cost is allocated over the remaining revised useful life of the asset. The new estimate is used to compute depreciation for current and future periods.


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144. Compare the different depreciation methods (straight-line, units-of-production, and double-declining-balance) with respect to the computation of depreciation per period and the total depreciation over the life of the asset.

The amount of depreciation expense per period is usually different for different methods. Yet total depreciation expense over the life of the asset is the same for all methods. Specifically, the straight-line method yields the same amount of depreciation for each accounting period. The units-of-production method results in depreciation expense that increases or decreases with the amount of asset usage. The double-declining-balance method is an accelerated method and yields more depreciation expense in the earlier years of ownership than straight-line depreciation.


145. Explain how to calculate total asset turnover. Describe what it reveals about a company's financial condition, whether a higher or lower ratio is desirable, and how it is best applied for comparative purposes.

Total asset turnover is calculated by dividing net sales by average total assets. The result is interpreted as the amount of net sales generated by each dollar of assets. Thus, the ratio reflects a company's ability to use its assets to generate sales. A high number is desirable; however, it must be interpreted in comparison with prior years as well as with competitors and industry standards.


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146. How is the cost principle applied to plant assets, acquisitions, including lump-sum purchases?

Plant assets should be recorded at cost when acquired. Cost includes all normal and reasonable expenditures necessary to get the asset in place and ready for its intended use. The cost of a lump-sum purchase is allocated among its individual assets based on their relative market (or estimated) values.


147. Explain (in detail) how to compute each of the following depreciation methods: straight-line, units-of-production, and double-declining-balance.

Straight-line depreciation is calculated by subtracting salvage value from the cost of the plant asset and then dividing the result by the useful life. When useful life is measured in years, the resulting amount is the annual depreciation expense for the asset.Units-of-production depreciation is calculated by subtracting salvage value from the cost of the plant asset and then dividing the result by the useful life in units. The resulting amount is the depreciation expense per unit. That amount is multiplied by the number of units produced during each accounting period to determine the total amount of depreciation expense for that period.The double-declining-balance method uses twice the straight-line rate (100%/useful life in years) multiplied by the beginning-of-period book value of the asset. The resulting amount is the depreciation expense for that period.


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148. Explain the difference between revenue expenditures and capital expenditures and how they are recorded in the accounting system.

Revenue expenditures do not materially increase an asset's life or productive capabilities. An example is ordinary repairs where benefits expire in the current accounting period. Revenue expenditures are debited to expense and are thus matched with current revenues.Capital expenditures make a plant asset more productive or extend its useful life. Examples are extraordinary repairs and betterments that benefit future periods. Capital expenditures are debited to asset accounts and are matched with future periods through depreciation expense.Immaterial (low cost) long-term expenditures are treated as current period expenses.


149. What are the general accounting procedures for recording asset disposals?

The first step in the accounting process for asset disposals is to bring the amount of depreciation up to date. The second step is to then remove the cost of the asset and its related accumulated depreciation from the accounting records. The third step is to recognize the amount of cash and/or other assets involved in the transaction. Fourth, record any gain or loss from the asset disposal by comparing the asset book value to the market value of any asset received. Exceptions to the fourth step are exchanges without commercial substance exchange. No gain or loss is recorded for exchanges without commercial substance.

AACSB: CommunicationsAICPA BB: IndustryAICPA FN: MeasurementDifficulty: HardLearning Objective: P4Learning Objective: P7

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150. Describe the accounting for natural resources, including their acquisition, cost allocation, and account titles.

The costs of natural resources are recorded as assets. Depletion is the process of allocating the cost of a natural resource to the period when it is consumed. Depletion is calculated by subtracting salvage value from cost and then dividing the result by the expected total unit production of the resource. The resulting amount is depletion expense per unit. The depletion per unit is multiplied by total units for the period to calculate the depletion expense for that period. Total depletion is carried in an accumulated depletion account. Natural resources are reported on the balance sheet at their cost minus accumulated depletion.


151. Describe the accounting for intangible assets, including their acquisition, cost allocation, and accounts involved.

Intangible assets are recorded at acquisition cost and are debited to asset accounts. Allocation of the cost of an intangible asset to expense is done by using the straight-line method and is called amortization. Amortization is recorded with a credit to accumulated amortization. Intangible assets are reported on the balance sheet at their cost minus accumulated amortization.


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152. The founders of Sambazon understand that managing plant assets is important to their company's success. What are some of the plant asset issues that the founders identify as important to them?

One challenge is maintaining the right kind and amount of plant assets to meet demand and be profitable. A key to their success is monitoring and controlling plant assets, which range from bottling and packaging equipment to delivery vehicles, plant facilities and land. Sambazon must finance, account for, manage, and recover all costs of long-term assets.


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Problems

153. A company's property records revealed the following information about its plant assets:

Calculate the depreciation expense for each machine for the year ended December 31, 2008, and for the year ended December 31, 2009.

Machine 1:2008: [($42,000 - $3,000)/3] x 3/12 = $3,2502009: ($42,000 - $3,000)/3 = $13,000Machine 2:2008: $86,000 x 40% x 6/12 = $17,2002009: ($86,000 - $17,200) x 40% = $27,520


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154. A company purchased a truck on October 1 of the current year at a cost of $40,000. The truck is expected to last six years and has a salvage value of $2,200. The company's annual accounting period ends on December 31. 1. What is the depreciation expense for the current year, assuming the straight-line method is used? 2. What is the depreciation expense for the current year, assuming the double-declining-balance method is used?

1. [($40,000 - $2,200)/6] x 3/12 = $1,5752. (100%/6) x 2 = 33.33%$40,000 x 33.33% x 3/12 = $3,333.33


155. A machine was purchased for $37,000 and depreciated for five years on a straight-line basis under the assumption it would have a ten-year life and a $1,000 salvage value. At the beginning of the machine's sixth year it was recognized the machine had three years of remaining life instead of five and that at the end of the remaining three years its salvage value would be $1,600. What amount of depreciation should be recorded in each of the machine's remaining three years?


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156. A company purchased a machine for $75,000 that was expected to last 6 years and to have a salvage value of $6,000. At the beginning of the machine's fourth year the company decided that the machine's estimated useful life should be revised to a total of 10 years instead of 6 years. Also, the salvage value was re-estimated to be $5,500. Straight-line depreciation was used throughout the machine's life. Calculate the depreciation expense for the fourth year of the machine's useful life.


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157. On July 1 of the current year, a company purchased and placed in service a machine with a cost of $240,000. The company estimated the machine's useful life to be four years or 60,000 units of output with an estimated salvage value of $60,000. During the current year, 15,000 units were produced.

Prepare the necessary December 31 adjusting journal entry to record depreciation for the current year assuming the company uses:

a. The straight-line method of depreciation.b. The units-of-production method of depreciation.c. The double-declining balance method of depreciation.


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158. On September 30 of the current year, a company acquired and placed in service a machine at a cost of $700,000. It has been estimated that the machine has a service life of five years and a salvage value of $40,000. Using the double-declining-balance method of depreciation, prepare a schedule showing depreciation amounts for the current year and the next 4 years (round answers to the nearest dollar). The company closes its books on December 31 of each year.

*for 3 months.**for 9 months; adjusted down to the salvage value.


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159. On April 1, 2008, SAS Corp. purchased and placed in service a plant asset. The following information is available regarding the plant asset:

Make the necessary adjusting journal entries at December 31, 2008, and December 31, 2009 to record depreciation for each year under the following depreciation methods:

a. Straight-line.b. Double-declining-balance.

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160. A company entered into the following transactions concerning its computer system:

On January 1, 2008 purchased a computer system that cost $1,480,000. The estimated useful life of the computer is 3 years and salvage value is $40,000. Straight-line depreciation is to be used. On January 1, 2009 the company determined that the estimated useful life of the computer would be 4 years instead of 3 years. The estimated salvage value will only be $10,000.

Prepare the journal entry to record depreciation expense for 2008.Prepare the journal entry to record depreciation expense for 2009.


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161. The Weiss Company purchased a truck for $95,000 on January 2, 2008. The truck was estimated to have a $3,000 salvage value and a 4 year life. The truck was depreciated using the straight-line method. During 2010, it was obvious that the truck's total useful life would be 6 years rather than 4, and the salvage at the end of the 6th year would be $1,500. Determine the depreciation expense for the truck for the 6 years of its life.


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162. Mahoney Company had the following transactions involving plant assets during 2008 and 2009. Unless otherwise indicated, all transactions were for cash.

Prepare the general journal entries to record these transactions.

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163. A company purchased a heating system on January 2, 1995, for $225,000. The system had an estimated useful life of 15 years. On January 3, 2008, the company completed a renovation of the system at a cost of $33,000 and now expects the system to be more efficient and last 8 years beyond the original estimate. The company uses the straight-line method of depreciation.

(a) Prepare the journal entry at January 3, 2008, to record the renovation of the heating system.(b) Prepare the journal entry at December 31, 2008, to record the depreciation for 2008.

Difficulty: MediumLearning Objective: C3Learning Objective: P2

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164. A company purchased and installed a machine on January 1, 2005 at a total cost of $72,000. Straight-line depreciation was calculated based on the assumption of a five-year life and no salvage value. The machine was disposed of on July 1, 2008. 1. Prepare the general journal entry to update depreciation to July 1, 2008. 2. Prepare the general journal entry to record the disposal of the machine under each of these three independent situations: a. The machine was sold for $22,000 cash. b. The machine was sold for $15,000 cash. c. The machine was totally destroyed in a fire and the insurance company settled the claim for $18,000 cash.


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165. On April 1, 2008 a company discarded a machine that had cost $10,000 and had accumulated depreciation of $8,000 as of December 31, 2007. The asset had a 5-year life and $0 salvage value. Prepare the journal entries to record the updating of the depreciation expense and discarding of this asset.


166. On April 1, 2008, a company disposed of equipment for $14,200 cash that had cost $35,000 on January 1, 2004. The equipment had a salvage value of $5,000, and a useful life 10 years. The double-declining-balance depreciation method was used. On December 31, 2007, accumulated depreciation was $20,664. Prepare a journal entry to record depreciation for 2008 up to the date of disposal of the equipment, and prepare a journal entry to record the disposal of the equipment.


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167. On January 2, 2005, a company purchased a delivery truck for $45,000 cash. The truck had an estimated useful life of seven years and an estimated salvage value of $3,000. The straight-line method of depreciation was used. Prepare the journal entries to record depreciation expense and the disposition of the truck on September 1, 2009, under each of the following assumptions:

a. The truck and $45,000 cash were given in exchange for a new delivery truck that had a cash price of $60,000. This transaction has commercial substance.b. The truck and $40,000 cash were exchanged for a new delivery truck that had a cash price of $60,000. This transaction lacks commercial substance.

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168. A company had net sales of $789,765 and average assets of $658,137. Calculate the company's total asset turnover.

$789,765/$658,137 = 1.2

AACSB: AnalyticAICPA BB: IndustryAICPA FN: Risk AnalysisDifficulty: EasyLearning Objective: A2

169. A company had net sales of $230,000 for 2008 and $288,000 for 2009. The company's average total assets for 2008 were $150,000 and $180,000 for 2009. Calculate the total asset turnover for each year and comment on the company's efficiency in the use of its assets.

2008: $230,000/$150,000 = 1.532009: $288,000/$180,000 = 1.60

In 2008 for every dollar of assets, the company earned $1.53 in net sales.This increased to $1.60 in net sales for every dollar of assets in 2009.Its efficiency in the use of its assets improved from 2008 to 2009.

AACSB: AnalyticAICPA BB: Critical ThinkingAICPA FN: Risk AnalysisDifficulty: MediumLearning Objective: A2

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170. A company had net sales of $541,500 in 2008 and $475,300 in 2009. Its average assets were $410,000 for 2008 and $400,000 for 2009. (1) Calculate the total asset turnover for each year. (2) Interpret and comment on the company's efficiency in the use of its assets.

2008: $541,500/$410,000 = 1.322009: $475,300/$400,000 = 1.19

Interpretation: For every dollar in assets in 2008, the company generated $1.32 in net sales. In 2009 it generated $1.19 in net sales for every dollar of assets. Over the two-year period the company reduced its efficiency in the use of its assets to generate net sales.

AACSB: AnalyticAICPA BB: Critical ThinkingAICPA FN: Risk AnalysisDifficulty: MediumLearning Objective: A2

171. Heidel Co. paid $750,000 cash to buy the plant assets of Rogers Co. that went out of business. An independent appraiser assigned the following values to the assets acquired:

Prepare Heidel's journal entry to record the acquisition of these assets.


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172. A company purchased a special purpose machine on August 1 of the past year, and it was installed and ready to run on January 1 of this year. The following costs were incurred in the purchase and installation of the machine.

Determine the total cost of the machine.


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173. A company paid $770,000 plus $5,000 in closing costs for property that included land appraised at $384,000; land improvements appraised at $128,000; and a building appraised at $288,000. The plan is to use the building as a manufacturing plant. Determine the amounts that should be recorded as:


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174. Prepare journal entries to record the following transactions of a company during the current year:

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175. A company purchased equipment on July 3 of the current year and placed it in service on August 1. The following costs were incurred in acquiring the equipment:

Determine the amount to be recorded as cost for the equipment.


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176. A company purchased land with a building for a total cost of $2,570,000 ($500,000 paid in cash and the balance on a long-term note). It was estimated that the land and building had market values of $900,000 and $2,100,000, respectively.

Determine the cost to be apportioned to the land and to the building and prepare the journal entry to record the acquisition.


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177. A company needed a new building. It found a suitable location with an existing old building on the land. The company reached an agreement to buy the land and the building for $960,000 cash. The old building was demolished to make way for the needed new building. Following is information regarding the demolition of the old building and construction of the new one:

Prepare a single journal entry to record the above costs assuming all transactions are paid in cash.


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178. A company purchased land on which to construct a new building for a cost of $250,000. Additional costs incurred were:

What total dollar amount should be charged to Land and what amount should be charged to the new Building?

All costs should be charged to Land, and none to Building. Specifically:


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179. A company made the following expenditures in connection with the construction of its new building:

Prepare a schedule showing the amounts to be recorded as Land, Buildings, and Machinery.

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*Assigned to operating expenses.


A new machine is expected to produce 600,000 units of product during its 8-year useful life. The machine cost $1,800,000 cash and it is estimated to have a $60,000 salvage value.

180. If the machine produces 70,000 units of product during its first year, what is the depreciation for the first year as calculated by the units-of-production method?

($1,800,000 - $60,000)/600,000 units = $2.90/unit70,000 units x $2.90/unit = $203,000


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181. If depreciation on the machine is calculated by the double-declining-balance method, what is the depreciation for the first year?

$1,800,000 x 25% = $450,000


182. What is the first year's depreciation on the machine as calculated by the straight-line method?

($1,800,000 - $60,000)/8years = $217,500


183. A company recently paid $1,500,000 on January 1 to buy a building with an estimated useful life of 20 years and a salvage value of $25,000. Calculate the depreciation expense for the third year after acquisition using declining-balance depreciation.

$121,500


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184. A company purchased a machine on January 1 of the current year for $750,000. Calculate the annual depreciation expense for each year of the machine's life (estimated at 5 years or 20,000 hours, with a salvage value of $75,000). During the machine's 5-year life its hourly usage was: 3,000; 4,000; 5,000; 5,000; and 3,000 hours.


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185. A company purchased an equipment system for $325,000 on January 2, 2008. The company expects the equipment to last for eight years or 60,000 hours of operation, with an estimated salvage value of $25,000. During 2008 the equipment was in operation for 8,000 hours, while in 2009 the equipment was in operation for 8,700 hours. Compute the depreciation expense relating to the equipment for 2008 and 2009 using the following depreciation methods:

a. Straight-line.b. Double-declining-balance.c. Units-of-production.

a. ($325,000 - $25,000)/8 = $37,500 for both 2008 and 2009

b. 100%/8 x 2 = 25%.25 x $325,000 = $81,250 for 2008.25 x ($325,000 - $81,250) = $60,937.50 for 2009

c. ($325,000 - $25,000)/60,000 = $5 per hour$5/hour x 8,000 hours = $40,000 for 2008$5/hour x 8,700 hours = $43,500 for 2009


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186. On January 1, a machine costing $260,000 with a 4-year life and an estimated $5,000 salvage value was purchased. It was also estimated that the machine would produce 500,000 units during its life. The actual units produced during its first year of operation were 110,000. Determine the amount of depreciation expense for the first year under each of the following assumptions: 1. The company uses the straight-line method of depreciation. 2. The company uses the units-of-production method of depreciation. 3. The company uses the double-declining-balance method of depreciation.

1. ($260,000 - $5,000)/4 = $63,7502. ($260,000 - $5,000)/500,000 = $0.51/unit110,000 x $0.51 = $56,1003. $260,000 x 50% = $130,000


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187. A company purchased a computer system on January 1, 2008, for $1,600,000. Prepare the journal entries to record depreciation for the first 6 months of 2010 and the sale of the computer assuming it is sold on July 1, 2010, for $1,000,000 cash. The straight-line method of depreciation was used based on an expected life of six years and a salvage value of $130,000.

AACSB: AnalyticAICPA BB: IndustryAICPA FN: MeasurementDifficulty: MediumLearning Objective: P2Learning Objective: P4

188. A company paid $314,000 for a machine that was expected to last five years and to have a salvage value of $40,000. During the third year of the machine's life, $37,000 cash was paid for replacement parts that were expected to increase the machine's productivity by 10% each year. Prepare the journal entry to record the $37,000 cost incurred in the third year.


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189. On January 1, a company purchased a machine for $75,000 that had a 6-year useful life and a salvage value of $6,000. After three years of straight-line depreciation, the company paid $7,500 cash at the beginning of the year to improve the efficiency of the machine. The effect of the expenditure was to increase the productivity of the machine without increasing its remaining useful life or changing its salvage value. Straight-line depreciation is used throughout the machine's life. 1. Prepare the journal entry to record the $7,500 expenditure. 2. Prepare the journal entry to record depreciation expense for the fourth year.


190. A company sold for $40,000 cash a machine that originally cost $90,000. The accumulated depreciation on this machine was $47,000 at the time of the sale. What was the company's gain or loss on this sale?


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191. A company had a building destroyed by fire. The building originally cost $650,000, and its accumulated depreciation as of the date of the fire was $300,000. The company received $400,000 cash from an insurance policy that covered the building and will use that money to help rebuild. Prepare the single journal entry to record the destruction of the building and the receipt of cash from the insurance company.


192. On April 1, 2008, a company discarded a computer that cost $15,000 and that had a useful life of 4 years, and a salvage value of $1,000. Based on straight-line depreciation, the accumulated depreciation as of December 31, 2007 was $10,700.

a. Prepare the journal entry to record depreciation up to the date of disposal of the computer.b. Prepare the journal entry to record the disposal of the computer.


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193. On April 1 of the current year, a company disposed of an automobile that had cost $20,000. The auto had a salvage value of $2,000, and a useful life of 5 years. The accounting records showed accumulated depreciation for this automobile of $8,100 as of April 1 of the current year. The asset was discarded after an accident, and $10,500 cash was received from an insurance claim. Prepare the journal entry to record the disposal of the automobile.


194. Mason Company sold a piece of equipment for $25,000 cash on December 31 after recording the annual depreciation on the asset. The equipment had an original cost of $92,500 and accumulated depreciation of $60,000. Prepare the general journal entry to record the sale of this asset.


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195. A company purchased mining property for $1,560,000. The property was estimated to contain 13,000,000 tons of ore. In the current year, the company removed and sold 247,000 tons of ore. Calculate the depletion expense for the current year.

$1,560,000/13,000,000 tons = $0.12/ton247,000 tons x $0.12 = $29,640


196. A company purchased mining property containing 15,000,000 tons of ore for $4,875,000. In year1, it mined 789,000 tons of ore and in year 2, it mined 1,235,000 tons. Calculate the depletion expense for year 1 and year 2.

$4,875,000/15,000,000 tons = $0.325 per tonYear 1: 789,000 tons x $0.325 per ton = $256,425Year 2: 1,235,000 tons x $0.325 per ton = $401,375


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197. A company purchased mining property containing 7,350,000 tons of ore for $1,837,500. In year 1, it mined and sold 857,000 tons of ore and in year 2, it mined and sold 943,000 tons of ore. Calculate the depletion expense for year 1 and year 2. What was the book value of the property at the end of year 2?

a. $1,837,500/7,350,000 tons = $0.25 per tonYear 1: 857,000 tons x $0.25 per ton = $214,250Year 2: 943,000 tons x $0.25 per ton = $235,750b.


198. On January 2 of the current year, a company purchased a patent for $35,000 with a useful life of 10 years. Prepare the journal entry to amortize the patent at the end of the first year.


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199. A company purchased a leasehold property for $8,400,000. The leasehold expires in 15 years. Prepare the journal entry to record the first year's amortization expense.


200. A company purchased a music distributor's collection of lyrics and songs for $1,425,000. The copyrights are expected to last another 30 years. Prepare the journal entry to record the amortization expense for the first year.


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201. A company traded an old forklift for a new forklift, receiving a $10,500 trade-in allowance and paying the remaining $37,200 in cash. The old forklift had cost $39,000, and straight-line accumulated depreciation of $27,200 had been recorded as of the exchange date under the assumption it would last five years and have a $5,000 salvage value. 1. What was the book value of the old forklift on the date of the exchange? 2. What amount of gain or loss (indicate which) should be recognized in recording the exchange, assuming the transaction has commercial substance? 3. What amount should be recorded as the cost of the new forklift?

3. In this case, the new forklift should be recorded at its market value of $47,700.


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202. The original cost of a machine was $60,000. After $45,000 of depreciation was recorded, the machine was traded in on a new machine priced at $75,000. A $10,500 trade-in allowance was received on the old machine and the balance of $64,500 was paid in cash. This transaction has commercial substance. Prepare the general journal entry to record this trade-in.


203. A company exchanged its used machine for a new machine in a transaction that had commercial substance. The old machine cost $70,000, and the new one had a cash price of $95,000. The company had taken $60,000 depreciation on the old machine and was allowed a $2,500 trade-in allowance and the balance of $92,500 was paid in cash. What gain or loss should be recorded on the exchange?


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204. A company exchanged an old truck for a newer model. The old truck account had a cost of $76,000 and accumulated depreciation of $65,000 as of the exchange date. The new truck had a cash price of $84,000, but the company was given a $15,000 trade-in allowance and the balance of $69,000 was paid in cash. Prepare the journal entry to record the exchange, if the transaction lacks commercial substance.


205. During the current year, a company exchanged an old truck costing $58,000 with accumulated depreciation of $52,000 for a new truck. The new truck had a cash price of $80,000 and the company received a $16,000 trade-in allowance on the old truck with the balance of $64,000 paid in cash. Prepare the journal entry to record the exchange, assuming the transaction lacked commercial substance.


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206. During the current year, a company acquired a new computer with a cash price of $12,800 by exchanging an old one on which the company received a $1,500 trade-in allowance (with the balance of $11,300 paid in cash). The old computer cost $9,000 and its accumulated depreciation was $5,500 as of the exchange date. Assuming the exchange transaction had commercial substance, prepare the journal entry to record the exchange.


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207. A company purchased office equipment for $4,300 by trading in old equipment with a cost of $2,000 and that had accumulated depreciation of $1,900 as of the exchange date. The company received a $75 trade-in allowance for the old equipment with the balance of $4,225 paid in cash. Prepare the journal entry to record the exchange, assuming the transaction had commercial substance.


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208. On April 1 of the current year, a company traded an old machine that originally cost $32,000 and that had accumulated depreciation of $24,000 for a similar new machine that had a cash price of $40,000. 1. Prepare the entry to record the exchange under the assumption that a $5,000 trade-in allowance was received and the balance of $35,000 was paid in cash. Assume the exchange transaction had commercial substance. 2. Prepare the entry to record the exchange under the assumption that instead of a $5,000 trade-in allowance, a $12,500 trade-in allowance was received and the balance of $27,500 was paid in cash. Assume the exchange transaction lacked commercial substance.


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Fill in the Blank Questions

209. Four main accounting issues for plant assets are: (1) _________________________, (2) _____________________________, (3) _________________________, (4) _____________________________. 1. Computing of the costs of plant assets.; 2. Allocating the costs of plant assets against revenues for the periods they benefit.; 3. Accounting for repairs and expenditures.; 4. Recording the disposal of plant assets.


210. The three main factors in computing depreciation are: (1) ____________________, (2) ____________________, (3) ___________________. 1. Cost.; 2. Salvage value.; 3. Useful life.


211. _____________________ is an estimate of an asset's value at the end of its benefit period. Salvage value (or residual value or scrap value)


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212. _____________________ refers to the insufficient capacity of a company's plant asset to meet the company's productive demands. Inadequacy


213. ____________________ refers to a plant asset that is no longer useful in producing goods or services with a competitive advantage because of new inventions and improvements. Obsolescence


214. The _____________________ principle requires that companies report the amount of accumulated depreciation on plant assets as well as the depreciation methods used to determine the annual depreciation expense. Full disclosure

AACSB: CommunicationsAICPA BB: IndustryAICPA FN: ReportingDifficulty: MediumLearning Objective: C3

215. Revising estimates of the useful life or salvage value of a plant asset is referred to as a ____________________________________________. Change in accounting estimate.

AACSB: CommunicationsAICPA BB: IndustryAICPA FN: ReportingDifficulty: MediumLearning Objective: C3

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216. _____________ are the federal income tax rules for depreciating assets. MACRS (Modified Accelerated Cost Recovery System)

AACSB: CommunicationsAICPA BB: Industry, LegalAICPA FN: MeasurementDifficulty: EasyLearning Objective: A1

217. The formula for calculating total asset turnover is _______________________________________. Net sales divided by average total assets


218. ______________________ are costs that increase the usefulness of land, but have limited useful lives and are thus depreciated. Land improvements


219. _______________________ depreciation recognizes equal amounts of annual depreciation over the life of an asset. Straight-line


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220. ______________________ depreciation charges a varying amount to expense for each period of an asset's useful life depending on its usage. Units-of-production


221. _____________________ depreciation uses a depreciation rate that is a multiple of the straight-line rate and applies it to an asset's beginning-of-period book value. Declining-balance


222. _______________________ are expenditures that extend an asset's useful life beyond its original estimate. Extraordinary repairs


223. ___________________ are additional costs of plant assets that do not materially increase the asset's life or productive capabilities. Revenue expenditures


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224. _____________________ are additional costs of plant assets that provide benefits extending beyond the current period; they increase or improve the type or amount of service an asset provides. Capital expenditures


225. _____________________ are revenue expenditures to keep an asset in normal, good operating condition; they are necessary if an asset is to perform to expectations over its useful life. Ordinary repairs


226. _________________________ are capital expenditures that make a plant asset more productive; they often involve adding a component to an asset or replacing one of its old components with a better one, and do not always increase an asset's life. Betterments


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227. The three usual means for disposal of an asset are: _________________________________________________________. Discarding, selling, or exchanging


228. The process of allocating the cost of a natural resource to the period when it is consumed is called _____________________. Depletion


229. ______________ is the process of systematically allocating the cost of an intangible asset to expense over its estimated useful life. Amortization


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Problems

230. Identify each of the following assets by balance sheet classification by placing an X in the correct classification: Plant Assets, Natural Resources, or Intangibles.

AACSB: CommunicationsAICPA BB: IndustryAICPA FN: ReportingDifficulty: EasyLearning Objective: P1Learning Objective: P5Learning Objective: P6

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231. A machine costing $450,000 with a four-year life and an estimated $30,000 salvage value is installed by Lux Company on January 1. The factory estimates the machine will produce 1,050,000 units of product during its life. It actually produces the following units for the first 2 years: year 1, 260,000; year 2, 275,000. Enter the depreciation amounts for years 1 and 2 in the table below for each depreciation method. Show calculation of amounts below the table.


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232. On July 1 of the current year, Botox Mining Co. pays $5,400,000 for land estimated to contain 7,200,000 tons of recoverable ore. It installs machinery on July 3 costing $864,000 that has an 8 year life and no salvage value and is capable of mining the ore deposit in six years. The company removes and sells 745,000 tons of ore during its first six months of operations ending on December 31. Depreciation of the machinery is in proportion to the mine's depletion as the machinery will be abandoned after the ore is mined. Prepare entries to record (a) the purchase of the ore deposit, (b) the costs and installation of the machinery, (c) the depletion assuming the land has a zero salvage value, and (d) the depreciation on the machinery.


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233. On July 1 of the current year, Suffox Company signed a contract to sublease space in a building for 7 years. Suffox Company paid Alec Company $56,000 for the right to sublease this space. After taking possession of the leased space, Suffox pays $140,000 for improving the office portion of the lease space. The improvements are paid on July 6 of the current year, and are estimated to have a useful life equal to the 14 years remaining in the life of the building. Prepare entries for Suffox to record (a) its payment to Alec for the right to sublease the building space, (b) its payment for the office improvements, (c) the December 31 year-end entry to amortize the cost of the sublease, (d) the December 31 year-end entry to amortize the office improvements.


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234. Rockport Company reports the following in millions: net sales of $25,355 for 2009 and $22,340 for 2008; end-of-year total assets of $15,875 for 2009 and $13,860 for 2008. Compute its total asset turnover for 2009 and assess its level if competitors average a total asset turnover of 2.0 times.

$25,355/((15,875 + 13,860)/2) = 1.7 timesRockport is not doing as well as its competitors. Rockport needs to improve relative to its competitors on total asset turnover.

AACSB: AnalyticAICPA BB: IndustryAICPA FN: MeasurementDifficulty: MediumLearning Objective: A2

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Chapter 10

Documents

Transcript of Chapter 10