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Question(s) / Instruction(s):

159. During 2002, Stover Corporation reported net sales of $2,500,000 and net income of $1,500,000. Stover also reported beginning total assets of $1,000,000 and ending total assets of $1,500,000. Stover’s asset turnover ratio is a. 2.5 times. b. 2.0 times. c. 1.7 times. d. 1.2 times.

160. Natural resources are generally shown on the balance sheet under a. Intangibles. b. Investments. c. Property, Plant, and Equipment. d. Owner's Equity.

161. Which of the following statements concerning financial statement presentation is not a true statement? a. Intangibles are reported separately under Intangible Assets. b. The balances of major classes of assets may be disclosed in the footnotes. c. The balances of the accumulated depreciation of major classes of assets may be disclosed in the footnotes. d. The balances of all individual assets, as they appear in the subsidiary plant ledger, should be disclosed in the footnotes.

162. Intangible assets a. should be reported under the heading Property, Plant, and Equipment. b. are not reported on the balance sheet because they lack physical substance. c. should be reported as Current Assets on the balance sheet. d. should be reported as a separate classification on the balance sheet.

163. A company has the following assets: Buildings and Equipment, less accumulated depreciation of $2,500,000 $8,000,000 Copyrights 1,200,000 Patents 5,000,000 Timberlands, less accumulated depletion of $3,500,000 6,000,000 The total amount reported under Property, Plant, and Equipment would be a. $20,200,000. b. $14,000,000. c. $19,000,000. d. $15,200,000.

The following questions are from the Study Guide.

s164. A term that is not synonymous with property, plant, and equipment is a. plant assets. b. fixed assets. c. intangible assets. d. long-lived tangible assets.

s165. The factor that is not relevant in computing depreciation is a. replacement value. b. cost. c. salvage value. d. useful life.

s166. Santayana Company purchased a machine on January 1, 2000, for $8,000 with an estimated salvage value of $2,000 and an estimated useful life of 8 years. On January 1, 2002, Santayana decides the machine will last 12 years from the date of purchase. The salvage value is still estimated at $2,000. Using the straight-line method, the new annual depreciation will be a. $450. b. $500. c. $600. d. $667.

s167. Improvements are a. revenue expenditures. b. debited to an appropriate asset account when they increase useful life. c. debited to accumulated depreciation when they do not increase useful life. d. debited to an appropriate asset account when they do not increase useful life.

s168. In exchanges of similar assets a. neither gains nor losses are recognized immediately. b. gains, but not losses, are recognized immediately. c. losses, but not gains, are recognized immediately. d. both gains and losses are recognized immediately.

s169. The entry to record depletion expense a. decreases owner's equity and assets. b. decreases net income and increases liabilities. c. decreases assets and liabilities. d. decreases assets and increases liabilities. s170. A purchased patent has a legal life of 15 years. It should be a. expensed in the year of acquisition. b. amortized over 15 years regardless of its useful life. c. amortized over its useful life if less than 15 years. d. amortized over 40 years.

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