SSNT10_Oper_Assets_2

SSNT10_Oper_Assets_2 - Operational Assets: Acquisition and...

Info iconThis preview shows pages 1–11. Sign up to view the full content.

View Full Document Right Arrow Icon
Operational Assets: Acquisition and Disposition
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Knowledge Check Each of the following would be considered an operational asset except: A) An oil well. B) A building. C) Inventories. D) A patent.
Background image of page 2
Knowledge Check The initial cost of land would include all of the following except: A) The cost of grading. B) Title search costs. C) Recording fees. D) Property taxes for the current period.
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Knowledge Check The following expenditures relate to machinery purchased by Nguyen Manufacturing: Purchase price $16,000 Transportation costs 800 Installation 500 Testing 2,000 Repair of part broken during shipment 300 At what amount should Nguyen capitalize the machinery? A) $17,300 B) $19,300 C) $19,600 D) $17,600
Background image of page 4
Knowledge Check Goodwill is the excess of the purchase price of an acquired company over the: A) Fair value of the net assets acquired. B) Sum of the fair values of the assets acquired. C) Book value of the acquired company. D) None of the above
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Knowledge Check The Sunderland Baseball Bat Company acquired all of the outstanding common stock of Gomez Lumber for $3,500,000. The book values and fair values of Gomez’s assets and liabilities on the date of purchase were as follows: Book Value Fair Value Current assets $ 860,000 $ 830,000 Operational assets 2,300,000 2,940,000 Liabilities 600,000 600,000 Sunderland should record goodwill of: A) $0 B) $940,000 C) $340,000 D) $330,000
Background image of page 6
Knowledge Check Ferris Corporation purchased three patents at a total cost of $960,000. The appraised values of the individual patents were as follows: Patent 1 $600,000 Patent 2 400,000 Patent 3 200,000 The costs that should be assigned to Patents 1, 2, and 3, respectively, are: A) $320,000; $320,000; $320,000. B) $480,000; $320,000; $160,000. C) $600,000; $400,000; $200,000. D) None of the above.
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Knowledge Check The City of San Martin gave a parcel of land to the Cheung Company as part of an agreement requiring Cheung to construct its office building on the donated land. The land cost the city $80,000 when purchased several years ago and had an appraised value of $200,000 on the date it was given to Cheung. As a result of the donation, Cheung should record: A) A debit to land of $80,000. B) A credit to revenue of $200,000. C) A credit to paid-in capital of $200,000. D) A credit to gain of $120,000.
Background image of page 8
Dispositions Update depreciation to date of disposal. Remove original cost of asset and accumulated depreciation from the books. The difference between book value of the asset and the amount received is recorded as a gain or loss . On June 30, 2009, Allen, Inc. sold equipment for $6,350 cash. The equipment was purchased on January 1, 2004 at a cost of $15,000. The equipment was depreciated using the straight-line method over an estimated ten-year life with zero salvage value. Allen last recorded depreciation on the equipment on December 31, 2008, its year-end. Prepare the journal entries necessary to record the disposition of this equipment.
Background image of page 9

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Dispositions Page 9 Date Description PR Debit Credit June 30 Depreciation Expense 750 Accumulated Depreciation 750 ($15,000 ÷ 10 years) × ½ = $750 GENERAL JOURNAL Update depreciation to date of sale.
Background image of page 10
Image of page 11
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 07/08/2011 for the course ACG 3482C taught by Professor Tinaker during the Fall '09 term at University of Florida.

Page1 / 58

SSNT10_Oper_Assets_2 - Operational Assets: Acquisition and...

This preview shows document pages 1 - 11. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online