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21. Capital expenditures are expenditures that increase the company's investment in productive facilities.

22. Ordinary repairs should be recognized when incurred as revenue expenditures.

23. A characteristic of capital expenditures is that the expenditures occur frequently during the period of ownership.

24. Once an asset is fully depreciated, no additional depreciation can be taken even though the asset is still being used by the business.

25. The fair market value of a plant asset is always the same as its book value.

26. If the proceeds from the sale of a plant asset exceeds its book value, a gain on disposal occurs.

27. If similar assets are exchanged, any gain on disposal should be deferred but any loss on disposal should be recognized.

28. The book value of a plant asset is the amount originally paid for the asset less anticipated salvage value.

29. A loss on disposal of a plant asset as a result of a sale or a retirement is calculated in the same way.

30. A plant asset must be fully depreciated before it can be removed from the books.

31. If a plant asset is sold at a gain, the gain on disposal should reduce the cost of goods sold section of the income statement.

32. A loss on disposal of a plant asset can only occur if the cash proceeds received from the asset sale is less than the asset's book value.

33. When similar plant assets are exchanged, a gain on disposal will decrease the cost basis of the acquired asset.

34. When similar plant assets are exchanged, a loss on disposal will increase the cost basis of the acquired asset.

35. Natural resources are long-lived productive assets that are extracted in operations and are replaceable only by an act of nature.

36. The cost of natural resources is not allocated to expense because the natural resources are replaceable only by an act of nature.

37. Conceptually, the cost allocation procedures for natural resources parallels that of plant assets.

38. Natural resources include standing timber and underground deposits of oil, gas, and minerals.

39. Depletion cost per unit is computed by dividing the total cost of a natural resource by the estimated number of units in the resource.

40. The Accumulated Depletion account is deducted from the cost of the natural resource in the balance sheet.

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