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Plant Assets
Depreciation Expense
Disposing of Plant Assets
Math
Other Chapter Stuff
100
Assets that are used for a number of years
Plant Assets
100

Generally accepted accounting principles require that the cost of the plant asset be expensed over ....

the asset's useful life

100
Depreciation Expense has a normal balance or...
Debit
100

If a plant asset costs $1,200, has accumulated depreciation of $1,000 and is sold for $200, the gain or loss on disposal is...

0, there is no gain or loss because it was disposed of for the Book Value

100

Land purchase: $100,000

Clearing Cost of Trees: $5,000

Real Estate Commissions Paid $10,000

Cost of Land for Books

$115,000

200

Recording a plant asset for the amount paid for the asset is an application of what Accounting Concept (H.C.)

Historical Cost

200

The original cost of the plant asset minus accumulated depreciation is known as the ...

book value

200
Accumulated Depreciation has a normal balance of ...
Credit
200

If a plant asset costs $5,000, has accumulated depreciation of $4,200 and is sold for $600, the gain or loss on the disposal is...

Loss of $200

200
Van Purchase: $20,000

Registration Fees: $500

Shipping Cost $1,000

Sales Tax Paid $1,600

Painting and Lettering $1,000

Total Cost for Books of Vehicle?

$23,600 (all but registration)

300

Term for land and anything attached to the land

Real Property

300

The formula for calculating straight line depreciation.

(Cost - salvage value) / useful life

300
What is the smallest unit of time used to calculate depreciation?
Month
300

The annual depreciation for a plant asset with original cost of $1000, estimated salvage value of $100, useful life of 10 years using the straight line method

$90

300
Which would be a fixed asset? 

A. $12,500 cost to repair the school roof

B. $80,000 cost for tearing down the walls between interior rooms and putting up new walls

C. An update to an asset that does not extend its useful life.

B

400

The entry for purchase of Land/Building with a Note to pay over 30 years.

DR Land

  CR Notes Payable

400
The calculation for units of activity method to determine a year of depreciation expense for the item.

(Original Cost - Estimated Salvage Value) / Maximum Units Possible X Units Used up in the Year

400
How do you figure the gain or loss on the sale of a plant asset?
Cash Received minus the Book value at the time of the sale
400

Double declining balance method came up to 40%.

Original cost for equipment $20,000

Accumulated Depreciation Year 1: $20,000 X 40% = $8,000

Amount for 2nd year depreciation.

$20,000 - $8,000 = $12,000

$12,000 X 40% = $4,800

400

How to calculate amortization of Patents and Copyrights. and Entry!

Cost / Useful Life (patent is max of 20 years)

DR Amortization Expense

  CR Patent (or Copyrights)

500

This property, plant, and equipment item category does NOT get depreciated.

Land

500
Transferring a portion of a plant asset's cost to an expense in each fiscal period that a plant asset is used is an application of what concept?
Matching Expenses with Revenue
500

Formula for double declining balance method if an asset has a useful life of 5 years.

1 divided by 5 = .2 (or 20% per year) X 2 = 40%

100% / 5 years = 20% .... 20% X 2 = 40% per year

500

Item purchased May 1 for $120,000, 10 year life, no salvage value. Depreciation entry for the year.

DR Depreciation Expense    $4,000

    CR Accumulated Depreciation      $4,000

500

Narrative of how to calculate Depletion. AND WHEN TO USE DEPLETION and the entry!

Use it for natural resources. Cost / units expected.

DR Depletion Expense

    CR Accumulated Depletion