ACC 220 CH 9 LO4-7

A fishing vessel that originally cost $250,000 with a 20-year life, and no salvage value after 12 years of ownership was disposed for $175,000. What is the gain/loss on disposal? (straight line depreciation)

• $75,000

• -$75,000

• $175,000

• -$150,000

The sale of a depreciable asset resulting in a loss indicates that the proceeds from the sale were:

• Less than current market value.

• Greater than cost.

• Greater than book value.

• Less than book value.

Equipment costing $3,000 with accumulated depreciation of $2,125 is exchanged for another asset with a fair value of $625. The exchange has commercial substance. How much is the gain or loss on this transaction?

• A gain of $250 should be recognized.

• A loss of $250 should be recognized.

• A loss of $500 should be recognized.

• No gain or loss should be recognized.

Which of the following terms best relates to natural resources?

• Depreciation.

• Depletion.

• Amortization.

• Accrual.

Which of the following statements regarding goodwill is false?

• The difference between the price paid to purchase a particular company, and the fair value of the underlying identifiable assets received (less liabilities assumed) is goodwill.

• Goodwill should not be amortized, but should be evaluated for impairment.

• Goodwill is an intangible asset.

• Goodwill may be recorded for a company whether it is internally generated or purchased.

what is formula Asset turnover?

• Average inventory/Net Sales

• Net Sales/ Average inventory

What is the formula for Return on Assets?

• Profit/Average Total Assets

• Average Total Assets/Profit

______ is the amount paid to purchase another company that is more than the fair value of the company,s net identifiable assets

• Goodwill

• Impairment loss

• Intangible assets

• Patents

_____ is an exclusive right issued by the federal government that enables the recipient to manufacture, sell, or otherwise control an invention for a period of 20 years from the date of application

• Patent

• Goodwill

• Licences

• Useful life

ABC co. reported net sales of $2,550 million, profit of $178 million, and average total assets of $3,132 million in 2017. what are the company,s return an assets and asset turnover?

• 0.81% and 5.7 times

• 5.7% and 1.2 times

• 7.0% and 5.7 times

• 5.7% and 0.81 times