Chapter+9+handout+2010F - Chapter 9 Class Handout 2010 Fall...

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Chapter 9 Class Handout 2010 Fall A loss on disposal of a plant asset is reported in the financial statements (2 pts) a. as a direct increase to the capital account on the balance sheet. b. as a direct decrease to the capital account on the balance sheet. c. in the Other Revenues and Gains section of the income statement. d. in the Other Expenses and Losses section of the income statement. Goodwill can be recorded (2 pts) a. when the company acquires a good location for its business. b. when the company has exceptional management. c. only when there is an exchange transaction involving the purchase of an entire business. d. when customers keep returning because they are satisfied with the company's products. Machinery was purchased with an invoice price of $100,000. Freight charges amounted to $5,000 and there was a cost of $5,000 for building a foundation and installing the machinery. It is estimated that the machinery will have a $30,000 salvage value at the end of its 10-year useful life. The company paid cash for the machine.
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