Question 1

Identify where each of the following accounts would be reported on Coca­Cola's financial statements
-Accumulated amortization

Accepted Answer

Accumulated amortization is reported on the balance sheet under intangible assets. It represents the cumulative amount of amortization expense that has been recognized on intangible assets over time, reducing their book value.

Question 2

Given below is a list of items that may be reported on a statement of cash flows. Identify each as one of the following using the indirect method:
-Depreciation expense

Accepted Answer

Depreciation expense is an operating activity because it represents a non-cash expense that reduces net income but does not involve the use of cash. It is added back to net income in the operating section of the statement of cash flows through the indirect method.

Question 3

Given the following list of methods of depreciation, select the method that is best for the situation or purpose given. Some answers may be used more than once, while others may not be used at all.
-Early in the life of the asset, this method maximizes net income.

Accepted Answer

Straight-line depreciation allocates the same amount of depreciation expense over the life of the asset, resulting in a consistent reduction in net income each year. This method would be best early in the life of the asset when maximizing net income is important.

Question 4

Exeter Corporation purchased a piece of equipment with a price of $80,000 on March 1, 2015. The amounts below are related to the equipment purchase. Match the items below and explain why each revenue expenditure is not capitalized.
-It was necessary for an architect to redesign the work space to accommodate the new equipment. A fee of $6,000 was paid.

Accepted Answer

The answer of Exeter Corporation purchased a piece of equipment...

Question 5

Given the following list of methods of depreciation, select the method that is best for the situation or purpose given. Some answers may be used more than once, while others may not be used at all.
-This method is the best for management bonus plans.

Accepted Answer

Straight-line depreciation is a method that spreads the cost evenly over the estimated life of the asset. This method is easy to understand and calculate, making it the best choice for management bonus plans where simplicity is key. It also ensures a steady reduction in book value over time, which may be desirable for financial reporting purposes. The other methods may be more appropriate for different situations, but in this case, straight-line is the best choice.

Question 6

Given the following list of methods of depreciation, select the method that is best for the situation or purpose given. Some answers may be used more than once, while others may not be used at all.
-This method minimizes taxable income early in the asset's life

Accepted Answer

The answer of Given the following list of methods of...

Question 7

Identify where each of the following accounts would be reported on Coca­Cola's financial statements
-Amortization expense

Accepted Answer

Amortization expense represents the depreciation of intangible assets, such as patents or trademarks. It would be reported as an expense in the operating section of the income statement.

Question 8

Identify where each of the following accounts would be reported on Coca­Cola's financial statements
-Copyright

Accepted Answer

Copyright would be reported on Coca-Cola's Balance Sheet under Intangible Assets as it is a non-physical asset that has value and can generate revenue for the company. It would not be reported on the Income Statement or Statement of Cash Flows.

Question 9

Given the following list of methods of depreciation, select the method that is best for the situation or purpose given. Some answers may be used more than once, while others may not be used at all.
-This method is the easiest to use.

Accepted Answer

Straight-line method is the easiest to use as it allocates the cost evenly over the useful life of the asset. It is also a common and widely accepted method of depreciation.

Question 10

Given below is a list of items that may be reported on a statement of cash flows. Identify each as one of the following using the indirect method:
-Proceeds from the sale of a building

Accepted Answer

Proceeds from the sale of a building are considered an investing activity because they involve the sale of a long-term asset.

Question 11

Identify where each of the following accounts would be reported on Coca­Cola's financial statements
-Building

Accepted Answer

Buildings are reported as Property, Plant, and Equipment on the balance sheet.

Question 12

Exeter Corporation purchased a piece of equipment with a price of $80,000 on March 1, 2015. The amounts below are related to the equipment purchase. Match the items below and explain why each revenue expenditure is not capitalized.
-The company purchased a three-year liability insurance policy to cover possible damage caused by the new equipment at a cost of $6,000.

Accepted Answer

The liability insurance policy is considered a revenue expenditure because it is not directly related to increasing the future economic benefits of the equipment and its usefulness, but rather to protecting against possible damages caused by the equipment. Therefore, it should be expensed as incurred rather than capitalized.

Question 13

Exeter Corporation purchased a piece of equipment with a price of $80,000 on March 1, 2015. The amounts below are related to the equipment purchase. Match the items below and explain why each revenue expenditure is not capitalized.
-The company financed the equipment purchase with a bank loan. Interest of $3,000 was paid on the loan during 2015.

Accepted Answer

Interest paid on a loan is considered a revenue expenditure because it is a cost of financing, not a cost directly attributable to bringing the equipment to its intended use. Therefore, it is not capitalized as part of the equipment's cost.

Question 14

Identify where each of the following accounts would be reported on Coca­Cola's financial statements
-Patents

Accepted Answer

Patents are intangible assets and would be reported on the balance sheet under that category.

Question 15

Exeter Corporation purchased a piece of equipment with a price of $80,000 on March 1, 2015. The amounts below are related to the equipment purchase. Match the items below and explain why each revenue expenditure is not capitalized.
-During the installation, the equipment was damaged and repair costs of $2,000 were incurred.

Accepted Answer

The repair costs incurred during installation are considered a revenue expenditure because they are not necessary to put the equipment in service or maintain its functionality. Instead, they are viewed as ordinary maintenance expenses that are expensed in the current period.

Question 16

Identify where each of the following accounts would be reported on Coca­Cola's financial statements
-Land improvements

Accepted Answer

Land improvements are a type of property, plant, and equipment asset, which would be reported on the balance sheet under that category.

Question 17

Identify where each of the following accounts would be reported on Coca­Cola's financial statements
-Total amortization since inception

Accepted Answer

Total amortization since inception is related to intangible assets such as patents, trademarks, and goodwill. Therefore, it would be reported under the "Intangible Assets" section on the balance sheet.

Question 18

Identify where each of the following accounts would be reported on Coca­Cola's financial statements
-Accumulated depreciation

Accepted Answer

Accumulated depreciation is related to the property, plant, and equipment, and is reported on the balance sheet under the same category.

Question 19

Identify where each of the following accounts would be reported on Coca­Cola's financial statements
-Research and development costs

Accepted Answer

Research and development costs would be reported on the Income Statement in the Operating Section.

Question 20

Identify where each of the following accounts would be reported on Coca­Cola's financial statements
-Goodwill

Accepted Answer

Goodwill is an intangible asset and would be reported on the balance sheet under the "Intangible Assets" section.

Quiz 8: Operating Assets: Property, Plant, and Equipment, and Intangibles

Identify where each of the following accounts would be reported on CocaCola's financial statements -Accumulated amortization

Given below is a list of items that may be reported on a statement of cash flows. Identify each as one of the following using the indirect method: -Depreciation expense

Given the following list of methods of depreciation, select the method that is best for the situation or purpose given. Some answers may be used more than once, while others may not be used at all. -Early in the life of the asset, this method maximizes net income.

Given the following list of methods of depreciation, select the method that is best for the situation or purpose given. Some answers may be used more than once, while others may not be used at all. -This method is the best for management bonus plans.

Given the following list of methods of depreciation, select the method that is best for the situation or purpose given. Some answers may be used more than once, while others may not be used at all. -This method minimizes taxable income early in the asset's life

Identify where each of the following accounts would be reported on CocaCola's financial statements -Amortization expense

Identify where each of the following accounts would be reported on CocaCola's financial statements -Copyright

Given the following list of methods of depreciation, select the method that is best for the situation or purpose given. Some answers may be used more than once, while others may not be used at all. -This method is the easiest to use.

Given below is a list of items that may be reported on a statement of cash flows. Identify each as one of the following using the indirect method: -Proceeds from the sale of a building

Identify where each of the following accounts would be reported on CocaCola's financial statements -Building

Identify where each of the following accounts would be reported on CocaCola's financial statements -Patents

Identify where each of the following accounts would be reported on CocaCola's financial statements -Land improvements

Identify where each of the following accounts would be reported on CocaCola's financial statements -Total amortization since inception

Identify where each of the following accounts would be reported on CocaCola's financial statements -Accumulated depreciation

Identify where each of the following accounts would be reported on CocaCola's financial statements -Research and development costs

Identify where each of the following accounts would be reported on CocaCola's financial statements -Goodwill

Quiz 8: Operating Assets: Property, Plant, and Equipment, and Intangibles

Identify where each of the following accounts would be reported on Coca­Cola's financial statements -Accumulated amortization

Given below is a list of items that may be reported on a statement of cash flows. Identify each as one of the following using the indirect method: -Depreciation expense

Given the following list of methods of depreciation, select the method that is best for the situation or purpose given. Some answers may be used more than once, while others may not be used at all. -Early in the life of the asset, this method maximizes net income.

Given the following list of methods of depreciation, select the method that is best for the situation or purpose given. Some answers may be used more than once, while others may not be used at all. -This method is the best for management bonus plans.

Given the following list of methods of depreciation, select the method that is best for the situation or purpose given. Some answers may be used more than once, while others may not be used at all. -This method minimizes taxable income early in the asset's life

Identify where each of the following accounts would be reported on Coca­Cola's financial statements -Amortization expense

Identify where each of the following accounts would be reported on Coca­Cola's financial statements -Copyright

Given the following list of methods of depreciation, select the method that is best for the situation or purpose given. Some answers may be used more than once, while others may not be used at all. -This method is the easiest to use.

Given below is a list of items that may be reported on a statement of cash flows. Identify each as one of the following using the indirect method: -Proceeds from the sale of a building

Identify where each of the following accounts would be reported on Coca­Cola's financial statements -Building

Identify where each of the following accounts would be reported on Coca­Cola's financial statements -Patents

Identify where each of the following accounts would be reported on Coca­Cola's financial statements -Land improvements

Identify where each of the following accounts would be reported on Coca­Cola's financial statements -Total amortization since inception

Identify where each of the following accounts would be reported on Coca­Cola's financial statements -Accumulated depreciation

Identify where each of the following accounts would be reported on Coca­Cola's financial statements -Research and development costs

Identify where each of the following accounts would be reported on Coca­Cola's financial statements -Goodwill