Financial Accounting 9Th Edition Libby Test Bank Full Chapter PDF

Financial Accounting 9th Edition Libby
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Chapter 08
Reporting and Interpreting Property, Plant, and Equipment; Intangibles; and

Natural Resources
True / False Questions
1. Tangible long-lived productive assets differ from intangible long-lived productive assets in that
tangible assets have physical substance whereas intangible assets have no physical substance.
True False
2. Patents, trademarks, and franchises are examples of tangible assets.
True False
3. The fixed asset turnover ratio measures the amount of operating income generated per dollar of
average fixed assets.
True False
4. The equipment cost initially reported on the balance sheet includes the equipment-related installation
and transportation costs.
True False
5. An expenditure is capitalized when it is reported as an expense on the income statement.
True False
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Copyright © 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
6. The land cost initially reported on the balance sheet may include legal fees and title insurance.
True False
7. The cash-equivalent price of an asset received is measured as the fair value of the consideration
given including cash, or the fair value of the asset received, whichever is more determinable.
True False
8. If a second-hand machine is purchased for productive use in a business, all renovation and repair
costs on the used machine incurred by the purchaser prior to its productive use should be reported as
part of the asset's cost on the balance sheet.
True False
9. Ordinary repairs and maintenance costs are incurred to maintain a long-lived productive asset and
are expensed as incurred.
True False
10. In accounting for depreciation, acquisition cost and useful life usually are known quantities, whereas
residual value is an estimate because it relates to an amount in the future.
True False
11. Depreciation is the process of allocating a long-lived asset's cost over its productive life.
True False
12. Depreciation is the process of estimating a long-lived asset's current market value.
True False
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13. If depreciation expense is calculated without taking into account the asset's residual value,
depreciation expense will be overstated.
True False
14. The book value of a depreciable asset equals its acquisition cost minus the depreciation expense
recorded since the acquisition date.
True False
15. On January 1, 2016, equipment was purchased for $80,000; the equipment's estimated residual
value is $15,000, and its estimated useful life is 10 years. For 2016, the depreciation expense under
the double-declining balance method is $13,000.
True False
16. On January 1, 2016, equipment was purchased for $100,000. The equipment's estimated residual
value is $20,000, and its estimated useful life is 8 years. On December 31, 2016, the book value
using the straight-line method of depreciation is $90,000.
True False
17. Use of the double-declining-balance method of depreciation results in higher depreciation expense
during the first year of an asset's life relative to use of the straight-line depreciation method.
True False
18. Use of the double-declining-balance method of depreciation results in increasing amounts of

depreciation expense over an asset's life.
True False
19. The units-of-production method of depreciation allocates an asset's cost over its useful life based on
the current period's production relative to its total estimated production.
True False
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20. In most cases, the depreciation method chosen for financial reporting purposes (GAAP) must also be
utilized for income tax reporting (IRS).
True False
21. If a long-lived asset has been impaired, the journal entry will require a debit to a loss account and a
credit to the long-lived asset account.
True False
22. If a company has an asset with a book value of $5.0 million and estimates the future cash flows to be
received over the asset's remaining life to be $5.5 million, no impairment has occurred and no loss
would be recognized.
True False
23. The first step in recording the disposal of a long-lived asset is to update its book value by recognizing
depreciation expense for the period of time since the last depreciation adjustment was made.
True False
24. Gains and losses on disposal of a long-lived asset are determined by comparing the asset's cost to
its book value.
True False
25. Selling a depreciable asset for a gain results in an increase in both net income and assets.
True False
26. The systematic and rational allocation of the acquisition cost of natural resources to those periods in
which the resources contribute to revenue is called depletion.
True False
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27. The method of depletion used to allocate the cost of natural resources to future periods is most
similar to the straight-line depreciation method.
True False
28. Natural resource depletion is recognized on the income statement for all resources removed during
the period whether they are sold or not.
True False
29. Goodwill is recorded only when an existing company is bought by another company and the purchase
price exceeds the fair value of the purchased company's net assets.
True False
30. Research and development costs are capitalized under GAAP once a product or process has been
developed.
True False
31. When determining cash flow from operating activities using the indirect method, depreciation and
amortization expense are deducted from net income.
True False
Multiple Choice Questions
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32. Which of the following would not be classified as property, plant and equipment on a balance sheet?
A. Land held for investment.

B. Equipment used in the manufacturing process.
C. A building used as corporate headquarters.
D. A natural resource being mined.
33. Which of the following accounts would not be considered a tangible asset?
A. Buildings
B. Land
C. Equipment
D. Copyright
34. Which of the following accounts would not be considered an intangible asset?
A. Goodwill
B. Patents
C. Research and development costs
D. Trademarks
35. Which of the following transactions would not increase the fixed asset turnover ratio?
A. An increase in sales revenue.

B. A profitable sale of fixed assets for cash.
C. Selling manufacturing equipment for a loss.
D. A decrease in operating expenses.
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36. Which of the following includes only tangible assets?
A. Land, buildings, and natural resources.

B. Land, buildings, and leasehold rights.
C. Natural resources, buildings, and franchises.
D. Licenses, trademarks, and land.
37. Which of the following includes only intangible assets?
A. Natural resources, patents, and trademarks.

B. Research and development costs, franchises, and trademarks.
C. Copyrights, licenses, and land.
D. Leaseholds, patents, and copyrights.
38. Which of the following statements regarding the fixed asset turnover ratio is incorrect?
A. The numerator is net operating income.

B. The denominator is average net fixed assets.
C. The ratio is used to assess a company's effectiveness in generating sales from its fixed assets.
D. The ratio increases when a company sells a factory building for a gain.
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39. The Wilson Company has provided the following information:
• Net sales, $200,000

• Net operating income, $40,000
• Net income, $20,000
• Average total assets, $125,000
• Average net fixed assets; $80,000
What is Wilson's fixed asset turnover ratio?
A. 1.60
B. 2.50
C. 0.25
D. 0.50
40. Which statement is false?
A. Shortening the estimated useful lives of depreciable assets will lead to a higher fixed asset
turnover.
B. Using an accelerated depreciation method instead of the straight-line depreciation method will lead
to reporting a higher fixed asset turnover during the earlier years of an asset's life.
C. Acquiring more long-lived, productive assets when a company is growing will lead to a lower fixed
asset turnover.
D. Selling off long-lived, productive assets while maintaining sales will lead to a lower fixed asset
turnover.
41. On March 1, Wright Company purchased new equipment for $50,000 by paying cash. Other costs
associated with the equipment were: transportation costs, $1,000; sales tax paid $4,000; and
installation cost, $2,500. At what amount will the equipment be recorded on a balance sheet?
A. $57,500.
B. $54,000.
C. $51,000.
D. $53,500.
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42. On August 1, Red Company purchased computer equipment for $10,000 cash and also gave 100
shares of White common stock that Red Company held as an investment. The White common stock
cost Red Company $5,000 and on August 1 had a fair value of $4,200. The installation costs for the
computer equipment were $700 and shipping costs were $500. What amount should be the total
amount debited to the computer equipment account?
A. $14,200.
B. $15,000.
C. $15,400.
D. $16,200.
43. Salvia Company recently purchased a truck. The price negotiated with the dealer was $40,000.
Salvia also paid sales tax of $2,000 on the purchase, shipping and preparation costs of $3,000, and
insurance for the first year of operation of $4,000. At what amount should the truck be recorded on
the balance sheet prior to recording depreciation expense?
A. $40,000.
B. $42,000.
C. $43,000.
D. $45,000.
44. Which of the following equipment related costs is not capitalized on a balance sheet?
A. Equipment installation costs.

B. Transportation costs associated with the equipment purchase.
C. Equipment maintenance costs.
D. The equipment's purchase price.
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45. Which of the following costs associated with a land purchase is not a component of the land cost
reported on a balance sheet?
A. The payment of delinquent property taxes.

B. The incurrence of legal fees.
C. The cost of title insurance.
D. The land's appraised value.
46. Smith Company exchanges assets to acquire a building. The market price of the Smith stock on the
exchange date was $35 per share and the building's book value on the books of the seller was
$250,000.
Which of the following is correct for Smith Company when Smith issues 10,000 shares of $10 par
value common stock and pays $20,000 cash in exchange for the building?
A. Total assets increase $350,000.

B. Stockholders' equity increases $250,000.
C. Stockholders' equity increases $330,000.
D. Total assets increase $330,000.
$250,000.
Which of the following is incorrect for Smith Company when Smith issues 10,000 shares of $10 par
value common stock and pays $20,000 cash in exchange for the building?
A. The common stock account increases by $100,000.

B. The building account increases by $370,000.
C. Stockholders' equity increases $350,000.
D. The additional paid-in capital account increases by $100,000.
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$250,000.
Which of the following journal entries is correct for Smith Company when Smith issues 10,000 shares
of $10 par value common stock and pays $20,000 cash in exchange for the building?
A. Building 270,000
Cash 20,000
Common stock 100,000
Additional paid-in capital 150,000
B. Building 370,000
Cash 20,000
C. Building 370,000
Cash 20,000
Additional paid-in capital 250,000
D. Building 370,000
49. Which of the following is true when a company constructs an asset for its own use?
A. Labor and material expenses for construction will increase.

B. Capitalized interest on construction loans will increase interest expense.
C. Assets will increase for labor, material, and interest costs paid for constructing the asset.
D. Net income will be decreases for capitalized costs of construction.
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50. A company acquires land by issuing 10,000 shares of its $10 par value common stock which is
currently trading at $20 per share, and the appraised value of the land is $250,000. Which of the
following statements correctly describes the recording of the land?
A. Record the land at its appraised value of $250,000 and recognize a gain of $50,000 since the
issued stock is currently worth $200,000.
B. Record the land at the $200,000 value of the consideration given up.
C. Record the land at the average of its appraised value of $250,000 and the $200,000 value of the
stock issued, thereby recognizing a $25,000 gain.
D. Record the land at the par value of the stock given up, $100,000.
51. If an expenditure related to a depreciable asset is incorrectly treated as a capital expenditure, instead
of as repairs and maintenance expense, which of the following statements is true?
A. The current year's net income will be lower and future depreciation expense will be higher.
B. The current year's net income will be higher and future depreciation expense will be lower.
C. The current year's net income will be higher and future depreciation expense will be higher.
D. The current year's net income will be lower and future depreciation expense will be lower.
52. Which of the following statements is incorrect?
A. Ordinary repairs and maintenance decrease net income.

B. Capital expenditures decrease assets.
C. Ordinary repairs and maintenance are recurring in nature.
D. Additions and improvements to a depreciable asset occur infrequently.
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53. Which of the following statements is incorrect?
A. Replacement of a truck's tires would be a capital expenditure.

B. Replacement of carpet in an office, damaged by a coffee spill, would be a repairs expense.
C. Replacement of a roof on a newly purchased building before using it as a store would be a capital
expenditure.
D. The cost of repainting a hallway would be maintenance expense.
54. Gilbert Company made an ordinary repair to a delivery truck during 2016 at a cost of $500 and
capitalized the repair cost. What is the effect on the 2016 financial statements as a result of the
incorrect capitalization?
A. The financial statements are not affected.

B. Assets are understated and net income is overstated.
C. Assets are overstated and net income is overstated.
D. Assets and stockholders' equity are both understated.
55. Which of the following would most likely not be recorded as ordinary repairs and maintenance?
A. Repairing the carpet in the sales department offices.

B. Repairing a leaky roof.
C. Putting a hydraulic lift on a delivery truck making it easier and quicker to deliver appliances.
D. Painting the exterior of the factory building.
56. What is the effect on the 2016 financial statements when a capital expenditure during 2016 was
incorrectly recorded as a repairs and maintenance expense?
A. The financial statements are not affected.

B. Assets and net income are both overstated.
C. Assets are overstated and net income was understated.
D. Assets and stockholders' equity are both understated.
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57. Which of the following best describes the objective of depreciation?
A. To allocate the cost of a tangible asset to the periods in which its use contributes to earning
revenue.
B. To estimate the remaining useful life of the asset.
C. To report the asset on the balance sheet at the estimated amount for which the asset could be
sold on the balance sheet date.
D. To estimate the current market value of the asset.
58. Which of the following is correct?
A. If a company fails to record depreciation expense, net income and expenses are overstated.
B. If a company fails to record depreciation expense, net income and assets are overstated.
C. If a company overstates depreciation expense, net income is overstated and assets are
understated.
D. If a company fails to record depreciation expense, stockholders' equity, net income, and assets
are understated.
59. Which of the following does not properly describe the depreciation process?
A. It is an allocation process.
B. It is consistent with the matching principle.
C. It involves the use of estimates.
D. It attempts to determine an asset's market value.
60. Which of the following describes the effect of recording depreciation expense at year-end?
A. Net income decreases and total assets decrease.

B. Total assets decrease and stockholders' equity is not affected.
C. Net income decreases and total assets increase.
D. Stockholders' equity is not affected and net income decreases.
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61. On January 1, 2016, Woodstock, Inc. purchased a machine costing $40,000. Woodstock also paid
$1,000 for transportation and installation. The expected useful life of the machine is 6 years and the
residual value is $5,000.
How much is the annual depreciation expense assuming use of the straight-line depreciation
method?
A. $6,100.
B. $6,000.
C. $5,950.
D. $5,750.
62. On January 1, 2016, Woodstock, Inc. purchased a machine costing $40,000. Woodstock also paid
$1,000 for transportation and installation. The expected useful life of the machine is 6 years and the
residual value is $5,000.
If Woodstock uses the straight-line depreciation method, which of the following statements is
incorrect?
A. The annual depreciation expense is $6,000.

B. The December 31, 2016 book value was $35,000.
C. The December 31, 2018 accumulated depreciation balance was $18,000.
D. The December 31, 2017 book value was $24,000.
63. A machine, acquired for a cash cost of $15,000, is being depreciated on a straight-line basis of
$2,700 per year. The residual value was estimated to be 10% of cost. The estimated useful life is
A. 3 years.
B. 4 years.
C. 5 years.
D. 6 years.
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64. Warren Company plans to depreciate a new building using the double declining-balance depreciation
method. The building cost $800,000. The estimated residual value of the building is $50,000 and it
has an expected useful life of 25 years.
What is the building's book value at the end of the first year?
A. $736,000.
B. $768,000.
C. $686,000.
D. $690,000.
65. Warren Company plans to depreciate a new building using the double declining-balance depreciation
method. The building cost $800,000. The estimated residual value of the building is $50,000 and it
has an expected useful life of 25 years.
Assuming the first year's depreciation expense was recorded properly, what would be the amount of
depreciation expense for the second year?
A. $30,720.
B. $32,000.
C. $58,880.
D. $64,000.
66. Which method of depreciation results in periodic depreciation expense that fluctuates from one period
to the next, not necessarily in a steadily upward or downward direction?
A. Straight-line.
B. Units-of-production.
C. Modified accelerated cost recovery system.
D. Declining balance.
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67. Hill Inc. purchased an asset on January 1, 2016. Hill chose an accelerated depreciation method to
depreciate the asset. Which of the following is correct if Hill would have chosen the straight-line
depreciation method instead?
A. Depreciation expense would have been lower in 2016.

B. The book value of the asset would have been lower at the end of 2016.
C. The net income would have been lower during 2016.
D. The accumulated depreciation balance would have been higher at the end of 2016.
68. On January 1, 2016, Pyle Company purchased an asset that cost $50,000 and had no estimated
residual value. The estimated useful life of the asset is 8 years and straight-line depreciation is used.
An error was made in 2016 because the total amount of the asset's cost was debited to an expense
account for 2016 and no depreciation was recorded. Pretax income for 2016 was $42,000. How much
is the correct 2016 pretax income?
A. $35,750.
B. $48,250.
C. $85,750.
D. $92,000.
69. Schager Company purchased a computer system on January 1, 2016, at a cash cost of $25,000. The
estimated useful life is 10 years, and the estimated residual value is $3,000. The company will use
the double declining-balance depreciation method.
How much is the 2017 depreciation expense?
A. $5,000.
B. $4,120.
C. $4,000.
D. $3,520.
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70. Schager Company purchased a computer system on January 1, 2016, at a cash cost of $25,000. The
estimated useful life is 10 years, and the estimated residual value is $3,000. The company will use
the double declining-balance depreciation method.
What is the accumulated depreciation balance as of December 31, 2017?
A. $9,000.
B. $4,000.
C. $7,920.
D. $8,520.
71. On January 1, 2016, Wasson Company purchased a delivery vehicle costing $40,000. The vehicle
has an estimated 6-year life and a $4,000 residual value.
What is the vehicle's book value as of December 31, 2017, assuming Wasson uses the straight-line
depreciation method?
A. $12,000.
B. $24,000.
C. $30,000.
D. $28,000.
72. On January 1, 2016, Wasson Company purchased a delivery vehicle costing $40,000. The vehicle
has an estimated 6-year life and a $4,000 residual value.
Wasson uses the units-of-production depreciation method and Wasson estimates that the vehicle will
be driven 100,000 miles. What is the vehicle's book value as of December 31, 2017 assuming the
vehicle was driven 10,000 miles during 2016 and driven 18,000 miles during 2017?
A. $29,920.
B. $28,800.
C. $24,800.
D. $25,920.
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73. Which of the following statements is false?
A. The book value at the end of an asset's useful life will be the same under all the depreciation
methods allowed under GAAP.
B. The balance in the accumulated depreciation account will be the same at the end of an asset's
useful life under all the methods allowed under GAAP.
C. Once you select a depreciation method, then you must use this method for all depreciable assets.
D. The annual depreciation expense and year-end book values will differ under the various
depreciation methods over the life of the asset.
74. Under what conditions would a company most likely adopt the double-declining-balance method for
financial reporting?
A. The company has high technology, robotic equipment in its plant that becomes obsolete quickly
and declines in utility to the company more rapidly in the early years of the assets' lives.
B. The company wants to maximize its net income during the earlier years of the asset's life.
C. The company wants to maximize the asset's book value in the earlier years of the asset's life.
D. The company wants to maximize the total depreciation expense over the life of the asset.
75. Which of the following statements is correct?
A. Companies will change the method of depreciating assets from one year to the next to reflect
usage of an asset.
B. Companies can affect the book value at the end of an asset's life by choosing one method of
depreciation over another.
C. Companies can use one method of depreciation for some of their long-lived productive assets but
then use a different method for another group or type of long-lived productive assets.
D. Companies can minimize an asset's book value in the first year of use by selecting the straight-line
depreciation method rather than the double-declining-balance method.
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76. Which of the following statements is correct?
A. Using straight-line depreciation in comparison to an accelerated depreciation method will result in

a lower reported amount of total assets at end of the first year of an asset's life.
B. Using accelerated depreciation in the first year of an asset's life will result in a higher net income
during the first year compared to using the straight-line depreciation method.
C. Using an accelerated depreciation method will lead to a higher fixed asset turnover ratio for the
first year.
D. Using straight-line depreciation in comparison to an accelerated depreciation method will lead to a
higher book value at the end of an asset's life.
77. Which of the following statements about the Modified Accelerated Cost Recovery System (MACRS)
is correct?
A. It is similar to the units-of-production depreciation method.

B. It is applied using longer asset lives than the estimated useful lives required by GAAP.
C. It provides a short-term tax benefit because of the higher depreciation expense reported in the
early years of an asset's life.
D. It is acceptable for use when preparing financial statements.
78. Which of the following statements about asset impairment is false?
A. Asset impairment loss is the difference between an asset's net book value and its estimated future
cash flows.
B. If an asset is impaired, a loss would be recognized in the period it can be estimated.
C. Impairment will lead to writing down the asset's net book value.
D. Asset impairment occurs when the estimated future cash flows are less than the asset's net book
value.
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79. A company has some bottling equipment which cost $8.5 million, has a net book value of $4.1 million,
estimated future cash flows of $3.7 million, and a fair value of $3.1 million.
How much is the asset impairment loss?
A. $5.4 million.
B. $4.1 million.
C. $0.4 million.
D. $1.0 million.
80. A company has some bottling equipment which cost $8.5 million, has a net book value of $4.1 million,
estimated future cash flows of $3.7 million, and a fair value of $3.1 million.
Which of the following correctly describes the recording of the asset impairment loss?
A. The loss account is debited for $1.0 million and the asset account is credited for $1.0 million.
B. The loss account is debited for $0.4 million and the asset account is credited for $0.4 million.
C. The loss account is debited for $5.4 million and the asset account is credited for $5.4 million.
D. The loss account is debited for $4.8 million and the asset account is credited for $4.8 million.
81. On December 31, 2016, Hamilton Inc. sold a used industrial crane for $600,000 cash. The original
cost of the crane was $5.0 million and its accumulated depreciation equaled $4.2 million on
December 31, 2016. What is the gain or loss from the December 31, 2016 equipment sale?
A. $600,000 gain.
B. $600,000 loss.
C. $200,000 loss.
D. $200,000 gain.
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82. Which of the following is correct when recording the disposal of equipment for a gain?
A. A debit to a gain account.

B. A credit to the equipment account for the asset's book value.
C. A debit to accumulated depreciation for the depreciation accumulated to the date of disposal.
D. A credit to cash.
83. Which of the following is correct regarding gain or loss on disposal of a long-lived asset?
A. Failure to report a gain on the sale of an asset results in an overstatement of net income.
B. Failure to report a gain on the sale of an asset results in an understatement of stockholders'
equity.
C. Failure to report a loss on the sale of an asset results in an understatement of net income.
D. Failure to report a loss on the sale of an asset results in an understatement of earnings per share.
84. Which of the following statements is correct with respect to the sale of a depreciable asset?
A. A gain occurs when the selling price exceeds book value.

B. A sale for a gain results in a decrease in total assets.
C. A sale for a loss results in an increase in total assets.
D. A loss occurs when the selling price is more than book value.
85. Carter Company disposed of an asset at the end of the eighth year of its estimated life for $10,000
cash. The asset's life was originally estimated to be 10 years. The original cost was $50,000 with an
estimated residual value of $5,000. The asset was being depreciated using the straight-line method.
What was the gain or loss on the disposal?
A. $1,000 loss.
B. $4,000 loss.
C. $5,500 gain.
D. $10,000 gain.
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86. Which of the following journal entries is correct when a company owns its office building for many
years and now sells the building?
A. Cash xxx
Accumulated depreciation xxx
Loss on sale xxx
Building xxx
B. Cash xxx
Building xxx
Gain on sale xxx
C. Cash xxx
Loss on sale xxx
Building xxx
D. Cash xxx
Gain on sale xxx
Building xxx
87. Which of the following statements is correct with respect to a loss on the sale of a depreciable asset?
A. Net income decreases and total assets increase.

B. Net income decreases and stockholders' equity increases.
C. Total assets decrease and stockholders' equity decreases.
D. Total assets increase and stockholders' equity decreases.
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88. Amanda Company purchased a computer that cost $10,000. It had an estimated useful life of five
years and a residual value of $1,000. The computer was depreciated by the straight-line method and
was sold at the end of the third year of use for $5,000 cash.
How much of a gain or loss should Amanda record?
A. A gain of $1,000.
B. A loss of $5,000.
C. A gain of $400.
D. A loss of $400.
89. Amanda Company purchased a computer that cost $10,000. It had an estimated useful life of five
years and a residual value of $1,000. The computer was depreciated by the straight-line method and
was sold at the end of the third year of use for $5,000 cash.
Which of the following statements correctly describes the computer sale?
A. Assets and stockholders' equity both increase by $5,000.

B. Assets decrease $5,000 and stockholders' equity is not affected.
C. Assets and stockholders' equity both decrease by $400.
D. Assets and stockholders' equity both increase by $400.
90. On March 1, 2016, Anniston Company purchased an oil well at a cost of $1,000,000. It is estimated
that 150,000 barrels of oil can be produced over the remaining life of the well and the residual value
of the well will be $100,000.
During 2016, 15,000 barrels of oil were produced and all of these barrels were sold. Which of the
following statements is incorrect with respect to the accounting for the oil well?
A. The 2016 cost of goods sold was $90,000.

B. The book value of the oil well decreased $90,000 during 2016.
C. The inventory of oil was $90,000 at December 31, 2016.
D. The depletion rate is $6.00 per barrel of oil.
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91. On March 1, 2016, Anniston Company purchased an oil well at a cost of $1,000,000. It is estimated
that 150,000 barrels of oil can be produced over the remaining life of the well and the residual value
of the well will be $100,000.
During 2016, 15,000 barrels of oil were produced and 10,000 barrels were sold. Which of the
following statements is correct with respect to the accounting for the oil well?
A. The 2016 cost of goods sold was $90,000.

B. The book value of the oil well decreased $60,000 during 2016.
C. The inventory of oil was $30,000 at December 31, 2016.
D. The 2016 cost of goods sold was $30,000.
92. During 2016, a company purchased a mine at a cost of $3,000,000. The company spent an additional
$600,000 getting the mine ready for its intended use. It is estimated that 300,000 tons of mineral can
be removed from the mine and the residual value of the mine will be $600,000. During 2016, 45,000
tons of mineral were removed from the mine and 35,000 tons were sold.
Which of the following statements is correct with respect to the accounting for the mine?
A. The 2016 net income decreased $450,000 as a result of the mining during the year.
B. The book value of the mine decreased $350,000 during 2016.
C. The inventory of minerals was $450,000 at December 31, 2016.
8-25
Education.
93. During 2016, a company purchased a mine at a cost of $3,000,000. The company spent an additional
$600,000 getting the mine ready for its intended use. It is estimated that 300,000 tons of mineral can
be removed from the mine and the residual value of the mine will be $600,000. During 2016, 45,000
tons of mineral were removed from the mine and 35,000 tons were sold.
Which of the following statements is incorrect with respect to the accounting for the mine?
A. The book value of the mine on December 31, 2016 was $2,640,000.
B. The book value of the mine decreased $450,000 during 2016.
C. The inventory of minerals was $100,000 at December 31, 2016.
94. Which of the following is most likely to be an intangible asset with an indefinite life?
A. Leasehold
B. Franchise
C. Patent
D. Goodwill
95. Which one of the following would not be recorded as an intangible asset?
A. Patents
B. Copyrights
C. Internally generated goodwill
D. Franchises
96. Which of the following is not true regarding certain assets?
A. A copyright provides the right to publish, use, and sell equipment.

B. A trademark provides the right to a name, image, or slogan identified with equipment.
C. The cost to design a software program for manufacturing equipment will be expensed as research
and development expense.
D. A patent on equipment enables the inventor to sell that equipment.
8-26
Education.
97. Failure to record amortization expense on a patent during the current year will result in which of the
following?
A. Net income will be overstated, but there would be no effect on total assets.
B. Net income for the year and total assets would both be overstated.
C. Assets will be overstated, but there would be no effect on net income for the year.
D. Net income and assets will both be understated.
98. Which of the following properly describes the accounting for goodwill?
A. Goodwill is recorded when it is internally generated.

B. Goodwill is amortized over its useful life.
C. Goodwill is the difference between the amount paid for a company relative to the book value of the
acquired company's net assets.
D. Goodwill is written down when it has been determined to be impaired.
99. Which of the following properly describes the accounting for a patent?
A. Research and development costs associated with a patent are capitalized.

B. The patent will be amortized over its useful life.
C. Patent amortization expense is accounted for within the accumulated depreciation account.
D. A patent's legal life extends to 70 years after the death of the inventor.
100.Which of the following statements is incorrect?
A. A copyright has a legal life not exceeding 70 years after the author's death.
B. A trademark is recorded on the balance sheet at an amount equal to the related research and
development costs incurred.
C. A patent's legal life is 20 years.
D. A franchise's amortization period is determined by the franchise agreement.
8-27
Education.
101.During 2016, the Bowtie Company reported net income of $1,872 million, depreciation expense of
$1,412 million and $978 million paid for purchases of property, plant and equipment. What would be
the effect on cash flows from operating activities during 2016?
A. Cash flows from operating activities would be increased by depreciation expense and decreased
by the property, plant and equipment purchases.
B. Cash flow from operating activities would be increased by depreciation expense and by the
property, plant and equipment purchases.
C. Cash flow from operating activities would be increased by depreciation expense but the property,
plant and equipment purchases would have no effect on cash flow from operating activities.
D. Depreciation is a noncash expense and would not be used to calculate cash flow from operating
activities.
102.Lincoln Restaurants reported net income in 2016 of $45.9 million and depreciation expense of $48.8
million. It also reported additions to property and equipment of $162.9 million. Which of the following
disclosures would appear on the 2016 statement of cash flows?
A. Depreciation of $48.8 million would be deducted from net income under operating activities and
the $162.9 million would be added under investing activities.
B. Depreciation of $48.8 million would be added to net income under operating activities and the
$162.9 million would be added under investing activities.
C. Depreciation of $48.8 million would be added to net income under operating activities and the
$162.9 million would be deducted under investing activities.
D. Depreciation of $48.8 million would be deducted from net income under operating activities and
the $162.9 million would be deducted under investing activities.
8-28
Education.
103.Barkley Company has a piece of equipment that it has been depreciating for 3 years. The equipment
originally was estimated to have a useful life of 8 years and at the beginning of the current year,
Barkley determines that the equipment's life has been extended to 10 years. When Barkley
calculates depreciation for the current year, how many years of life should be used to calculate the
depreciation expense?
A. 5 years.
B. 7 years.
C. 8 years.
D. 10 years.
104.Williams Company purchased a machine costing $25,000 and is depreciating it over a 10-year
estimated useful life with a residual value of $3,000. At the beginning of the eighth year, a major
overhaul on it was completed at a cost of $8,000, and the total estimated useful life was changed to
12 years with the residual value unchanged. How much is the year 8 depreciation expense assuming
use of the straight-line depreciation method?
A. $2,200.
B. $2,920.
C. $3,100.
D. $8,800.
105.Augie Corporation purchased a truck at a cost of $60,000. It has an estimated useful life of five years
and estimated residual value of $5,000. At the beginning of year three, Augie's managers concluded
that the total useful life would be four years, rather than five years. There was no change in the
estimated residual value. What is the amount of depreciation that Augie should record for year 3
under the straight-line depreciation method?
A. $15,500.
B. $8,250.
C. $11,000.
D. $16,500.
8-29
Education.
106.International Financial Reporting Standards (IFRS) require the recording of research and
development costs as follows:
A. Expense research and development costs.

B. Expense research costs and capitalize development costs.
C. Expense development costs and capitalize research costs.
D. Capitalize research and development costs.
107.International Financial Reporting Standards (IFRS) allow accounting for tangible and intangible
assets at fair value by:
A. Reapplication.
B. Reconsideration.
C. Revaluation.
D. Appraisalization.
108.Which of the following is not true in comparing U.S. GAAP and International Financial Reporting
Standards (IFRS)?
A. IFRS and U.S. GAAP both allow intangible assets to be reported at their cost minus accumulated
amortization.
B. U.S. GAAP requires expensing of all costs of research and development.
C. IFRS allows for adjustments for increases in fair value of tangible assets.
D. IFRS requires capitalizing of research costs and expensing of development costs.
Essay Questions
8-30
Education.
109.The following information is available for Coca-Cola and PepsiCo:
Coca-
PepsiCo
Cola
Net fixed assets (beginning of

$4,168 $5,266
year)
Net fixed assets (end of year) 4,435 5,438
Net sales for the year 19,889 20,438
Net income for the year 2,177 2,183
Required:
Compute the fixed asset turnover ratio for both Coca Cola and PepsiCo. Round your answers to two
decimal places.
8-31
Education.
110.The following information was available for Landmark Restaurants for the past three years.
Required:
Using this information, compute the fixed asset turnover ratio for Year 3 and Year 2. (Round your
answers to two decimal places.)
In thousands Year 3 Year 2 Year 1
Net fixed assets $965,575 $830,930 $587,829
Net sales 1,105,755 894,795 746,642
Net income 45,901 41,522 26,920
111.On January 1, 2016, Trenton Company purchased a machine costing $50,000. Trenton also incurred
the following costs: transportation, $1,000; installation, $2,000; and sales tax, $3,000.
Required:
Prepare the journal entry to record the machine acquisition assuming cash was paid.
8-32
Education.
112.Waterloo Corporation purchased factory equipment for a cost of $1,800,000. There was also the cost
of $100,000 for delivery, $220,000 for installation and modifications to the factory building, and
$60,000 in interest costs on borrowed funds used to acquire the equipment.
Required:
Calculate the acquisition cost of the new equipment.
113.In Year 4, Landmark Restaurants reported the cost of property and equipment at $1,189.8 million and
the accumulated depreciation at $224.2 million. In that same year, Coca Cola reported $10,149
million in long-lived, productive assets and accumulated depreciation on them of $4,058.
Required:
A. Estimate the approximate percent of remaining life of the assets for Landmark and Coca Cola.
B. Which company appears to have newer assets with longer remaining lives?
8-33
Education.
114.Hi-Crest Company purchased a machine on January 1, 2016, for $300,000. The machine has an
estimated useful life of 5 years and a $10,000 residual value.
Required:
Calculate depreciation expense and the year-end book value for 2016 and 2017 using the double
declining-balance method of depreciation.
115.The financial statements of Franklin Company contained the following errors:
December 31, December 31,

Item
2015 2016
Depreciation expense $1,000 $900

on office equipment understated overstated
Required:
A. Was net income for 2015 understated or overstated? Briefly explain your answer.
B. 1. Considering the effect of the errors of both years at December 31, 2016, is retained earnings
overstated or understated, and by what amount?
2. Briefly explain your answer to part B (1).
8-34
Education.
116.On January 1, 2015, Boston Company purchased a heavy duty machine having an invoice price of
$13,000. Boston paid transportation and installation costs totaling $3,000. The machine is estimated
to have a 4-year useful life and a $1,400 residual value.
Required:
Calculate depreciation expense and book value for 2015-2018, assuming double declining-balance
method of depreciation.
8-35
Education.
117.Covey Company purchased a machine on January 1, 2016, by paying cash of $250,000. The
machine has an estimated useful life of five years, is expected to produce 500,000 units, and has an
estimated residual value of $25,000.
Required:
A. Calculate depreciation expense to the nearest whole dollar for each year of the machine's useful
life under.
1. Straight-line depreciation method.
2. Double declining-balance method.
B. What is the book value of the machine after three years using the double declining-balance
method?
C. What is the book value of the machinery after three years using the straight-line method?
D. If the machine was used to produce and sell 120,000 units in 2016, what would be the
depreciation expense using the units-of-production method?
8-36
Education.
118.Hubbard Company purchased a truck on January 1, 2015, at a cost of $34,000. The company
estimated that the truck would have a useful life of 4 years and a residual value of $4,000.
Required:
A. Calculate depreciation expense under straight line and double declining balance for 2015-2018.
B. Which of the two methods would result in lower net income in 2015 and 2018?
119.Allison Company purchased a machine for $1,200,000 at the beginning of 2015. Allison was using
the double-declining-balance (200%) method to depreciate the asset and its useful life was estimated
to be 5 years with a residual value of $200,000. At the end of 2016, Allison Co. estimates the future
cash flows from the asset to be equal to $500,000 and the fair value to be $450,000.
Required:
What is the amount of the impairment loss?
8-37
Education.
120.A company purchased equipment for $800,000 and has depreciated it using the straight-line method
for the past 5 years when its original life was estimated to be 10 years with a $200,000 residual
value. The equipment's utility to the company has declined because management expects the
equipment to generate net cash flows over the remaining years of $300,000. The asset's fair value at
the end of the fifth year is $200,000.
Required:
If the asset has been impaired, record the journal entry to record the impairment.
121.Beckworth Company purchased a truck on January 1, 2015, at a cash cost of $10,600. The
estimated residual value was $400 and the estimated useful life 4 years. The company uses straight-
line depreciation computed monthly. On July 1, 2018, the company sold the truck for $1,900 cash.
Required:
A. What was the depreciation expense amount per month?

B. What was the amount of accumulated depreciation at July 1, 2018?
C. Prepare the required journal entries on the date of disposal, July 1, 2018. (Assume no 2018
depreciation had yet been recorded)
8-38
Education.
122.Lue Company sold used equipment for $450,000 cash. The equipment was purchased 5 years ago
for a cost of $800,000. It has been depreciated using the straight-line method over an estimated
useful life of 10 years with an estimated residual value of $50,000.
Required:
Prepare the journal entry at the end of year five for the asset's disposal assuming the fifth year's
depreciation had been recorded.
123.Bennett Corporation sold a piece of equipment on June 30, 2018, for $50,000 cash. The equipment
had been purchased on January 1, 2014, for $150,000. The equipment had an estimated useful life
of 6 years and a $30,000 residual value. Bennett Corp. has been using the straight-line method of
depreciation and has a year-end of December 31st.
Required:
Prepare any necessary journal entries on June 30, 2018, assuming that 2018 depreciation expense
has not been recorded.
8-39
Education.
124.Spa Sources Corporation purchased a machine that had an original cost of $60,000 and an
estimated residual value of $10,000. The useful life was expected to be 8 years and straight-line
depreciation is used. At the end of 2016, the book value of the machine was $35,000. Spa Sources
sold the machine for $32,000 cash on October 1, 2017.
Required:
A. Prepare the journal entry to record depreciation for 2017 up to the date of sale.
B. Prepare the journal entry to record the sale of the machine.
8-40
Education.
125.Prepare the required adjusting journal entry at December 31, 2016, the end of the annual accounting
period for the three items below. Assume that no adjusting entries have been made during the year.
If no entry is required, explain why.
A. Polk Company acquired a patent that cost $6,000 on January 1, 2016. The patent was registered
on January 1, 2012. The useful life of a patent is 20 years from registration.
B. Polk Company acquired a gravel pit on January 1, 2016, that cost $24,000. The company
estimates that 30,000 tons of gravel can be extracted economically. When all the gravel has been
extracted, no residual value is anticipated. During 2016, 4,000 tons were extracted and sold.
C. On January 1, 2016, Polk Company acquired a used dump truck that cost $6,000 to use hauling
gravel. The company estimated a residual value of 10% of cost and a useful life 4 years. The
company uses straight-line depreciation.
8-41
Education.
126.Benson Mining Company purchased a site containing a mineral deposit during 2016. The purchase
price was $820,000, and the site is estimated to contain 400,000 tons of extractable ore. Benson
constructed a building at the site, at a cost of $500,000, to be used while the ore is being extracted.
When the ore reserves are gone, the building will have no further value.
Required:
A. Explain the objective of recording depletion of natural resources.

B. Determine Benson's depletion rate per ton of ore.
C. Prepare the journal entry to record depletion for the year 2016, when Benson mined and sold
150,000 tons of ore.
D. Prepare the journal entry to record depreciation on the building for 2016. Benson calculates
depreciation on the building using the units-of-production method based on the amount of ore
extracted (150,000 tons in 2016).
8-42
Education.
127.On January 1, 2016, Gordon Company purchased a patent for $420,000 from an inventor who had
developed a new manufacturing process. At the time of the purchase, the patent had a remaining
useful life of 10 years.
Required:
A. Prepare the journal entry to record Gordon's purchase of the patent.

B. Prepare the journal entry to record amortization of the patent on December 31, 2016.
C. At the end of 2019, after amortization had been recorded through December 31, 2019, Gordon
concluded that the estimated future cash flows from the patent to be $250,000. The patent's
estimated fair value on December 31, 2019 was $200,000. Prepare the journal entry to record the
patent impairment, if necessary.
128.Pier 5 has been in business 8 years with 4 stores in the San Francisco bay area. Its local reputation
for making savory pies such as curried potatoes is well recognized. A national food distributor has
offered to purchase the company. Pier 5 has $0.9 million of net assets at book value, but those net
assets have a fair value of $1.2 million. If the distributor offers to buy Pier 5 for $3.5 million, how
much will be recorded as goodwill based on the offered acquisition price?
8-43
Education.
129.Landmark Restaurants reported net income of $45.9 million during Year 6. Landmark reported
depreciation and amortization of plant and equipment of $48.8 million and cash paid for additions to
property, plant and equipment of $162.9 million during Year 6.
Required:
Explain where each of these items would be reported and their impact on cash flows on the
statement of cash flows.
8-44
Education.
130.Frankel Feed purchased a new machine on January 1, 2016. Relevant information is as follows:
Cost when acquired $26,000
Estimated residual value 2,000
Estimated useful life 10 years
Accumulated depreciation at the end of year

5
12,000
(assume straight-line depreciation)
It is now the beginning of year 6 and the management reevaluated the estimates related to the
machine.
Required:
Compute the depreciation expense for year 6 under each of the following independent cases:
Case Event
The estimated total useful life is changed to 15

A
years, residual value is unchanged.
The residual value is changed to $1,000; useful

B
life unchanged.
The estimated total useful life is changed to 7

C years and the residual value is changed to
$3,000.
8-45
Education.
Another random document with
no related content on Scribd:
Hannes parahti kuin haavoitettu päästyään ylisille, jossa oli hänen
yksinäinen makuutilansa.
Hän tunsi rakastavansa tyttöä, mutta toisin kuin olisi tahtonut. Eikö
hän voisi koskaan rakastaa oikein, rakastaa sielua, ihmistä, eikä
ruumista.
Hannes puristi tyynyä syliinsä ja puri hammasta. Nyt ei hän

tahtonut sortua, ei ainakaan tällä kertaa hirvittävän himonsa uhriksi.
Hän kirosi itseään ja sukuaan ja tuskanhiki helmeili hänen
otsallansa.
Voi, eikö mistään löytyisi pelastusta ja apua!
Hän oli varma siitä, että tyttö rakasti häntä niinkuin tyttö ensi
kerran vain voi rakastaa. Tyttö oli sanonut sen ja hänen kirkkaissa
silmissään oli ollut kyynelhuntuinen loiste.
— Nyt minä olen näin iloinen, että olen säilyttänyt itseni

koskemattomana tätä suurta onneani varten, sinua varten, oli tyttö
puhunut.
Hannes ajatteli tätä sydän veristäen. Se oli koskenut kipeästi

häneen jo silloin kun tyttö sen sanoi. Nyt selvisi hänelle tytön
sanojen johdosta, että häneltä oli onnenportti lyöty kiinni. Hän ei voisi
tällaisena tyttöä omistaa, eikä hänen rakkauttaan.
Yön hetket kuluivat. Sairas veri vaati osaansa. Onneton mies

taisteli vastaan kylmän hien putoillessa otsalta.
Hänen täytyi ulos. Hän ei jaksaisi muuten.

Sama oli ulkonakin. Heinäkuun yö oli raskas lämmöstä ja
miljoonien solujen luomisinnosta.
Hannes tunsi selvästi, että jos hän nyt sortuisi, ei hän kehtaisi eikä
voisi katsoa tyttöä enää kertaakaan silmiin. Ja sitä hän ei tahtonut.
Vaikkapa hänen täytyisi jättää tyttö, hänen pitäisi saada katsoa
rehellisesti tyttöä silmiin.
Muuten hän lähtisi kuin varas talosta.
Hannes kierteli polkuja talon vainiovieruksilla ja häpesi itseään.

Että hänen täytyi näin taistella ja että himo ei ottanut haihtuakseen
hänen verestään, ei suuren rakkaudenkaan tieltä.
Hannes päätti jo lähteä talosta ja kirjoittaa tytölle. Kun hän kokosi

tavaroitaan, huomasi hän, että näin tulisi paljastaneeksi tytölle
heikkoutensa ja sitä hän ei vielä ainakaan tahtonut.
Mutta hänen täytyi saada tavata ihmisiä, ketä vain ja aivan

viipymättä.
Saada puhua jonkun kanssa, vaikkapa kuinkakin vähäpätöisiä
sanoja.
Hannes muisti, että päällikkö oli pyytänyt häntä puhumaan silloin

kun vain tahtoi ja oli ollut niin ystävällinen. Hän kuului joskus öillä
valvovan, ehkäpä hän nytkin…
Hannes ei harkinnut pitemmältä oliko sopimatonta mennä

herättämään toista keskiyöllä, hän meni ja koputti päällikön ovelle.
Ovi aukeni kohta ja päällikkö kysyi:
— No, mitäs nyt?

— Minä vain… minulla olisi asiaa ja minä tarvitsisin apuanne…
suokaa anteeksi, että näin…
— Käykää sisään… olinkin valveilla tässä … no, mitä on

oikeastaan tapahtunut. Puhu nyt aivan kuin vanhemmalle veljellesi ja
kättä ensiksi sen päälle.
Hannes tunsi miehessä ymmärtävän ystävän ja kertoi illan

tapahtuman ja oman toivottoman taistelunsa.
— Mutta hyvä mies, sinun on selvintä heti mennä naimisiin, ei

siinä muu auta.
— Sepä siinä onkin, etten tällaisena voi sitä ajatella.
— Mutta hän voi parantaa sinut.
— Se olisi kovin alentavaa minulle miehenä ja, etkö huomaa,

minun pitäisi voida rakastaa häntä oikein, jota hän tietysti odottaa
minulta. Mitä hän sanoo saatuaan tietää, että olen tällainen raukka.
— Eihän sukuperintö ole sinun syysi ja aiheuttamasi ja jos tyttö

kerran rakastaa sinua, ymmärtää hän myöskin tilasi ja opettaa sinua
rakastamaan oikein, kuten sinä sitä sanot.
— Voihan olla niinkin, mutta siinä piilee myöskin se vaara, että

minun lapseni ehkä saisivat maksaa kerran kalliisti sen, että itse en
ole voittanut itseäni:
Mies sängynlaidalla katseli neuvottomana eteensä. Nuori mies oli

ihmeellinen päätelmissään. Mistähän, sairaan suvun jälkeläinen,
olikin saanut sellaisen varmuuden ja niin suuret vaatimukset itseään
kohtaan.
— Mutta yleisten periaatteiden kannalta…
— Älä puhu sellaisista periaatteista, keskeytti Hannes. Minä kyllä

tunnen ne. Nykyinen maailma, varsinkin tietoviisaat ja oppineet,
nauraisivat minulle, mutta siksipä onkin koko yhteiskuntamme
sairautta täynnä. Ei, minä en alistu yleisten katsantokantojen
mukaiseksi. Minä en pyydä tyttöä omakseni ennen kuin voin olla
itsestäni varma. Jos en voi rakastaa muuten, kuin että
sukupuolitunne on ensi sijalla määräämässä, niin mieluummin
kierrän kuin koira maailmalla sukukiroukseni painamana!
Mies silmäili edelleen neuvottomana Hannesta, joka seisoi

ikkunan ääressä kasvot kalpeina katsellen nousevaa aurinkoa.
— Aiotko sitten jättää tytön? kysyi hän.
— En. Aion puhua hänelle ja jos hän odottaa minua, niin… ja

sitten, hyvä ystävä, minä en voi olla päivääkään enää tukkilaisena.
Se tappaa kaikki hyvät aikomukseni. Minun täytyy päästä sellaiseen
työhön käsiksi, jossa voin ponnistaa. Kun pääsen kiinni maahan…
— Kyllä minä tuon hyvin ymmärrän, vaikka onkin vaikea luopua

näin pian sinusta. Olisin voinut järjestää sinulle yhtiössä minkälaisen
paikan tahansa. Voisin vieläkin, mutta et taida suostua?
— Sinä voisit toimittaa minut helpommille päiville, vaikka

entinenkin toimeni on liian helppoa. Ei se käy päinsä.
Hartiavoimaiseen työhön minun on päästävä.
— Mutta eihän tietääkseni sinulla ole mitään paikkaa tai muuta

tiedossa, jäisit siksi aikaa, kun järjestelet.
Hannes pysyi päätöksessään ja kiittäen kaikesta poistui kohta
huoneesta.
Aurinko oli jo noussut ja sen säteilyssä värähteli kasteinen maa.
Hannes jäi hetkiseksi istumaan pihamaan kivelle. Nyt hänen ei

tarvinnut hävetä nousevaa aurinkoa. Hän oli voittanut yöllisen
taistelun ja tunsi sanomatonta mielihyvää siitä.
Voisikohan se ehkä vastakin käydä näin helposti? Ja voisiko vielä

jäädä toistaiseksi, kokeilemaan voimiaan?
Kyllä se kävisi mahdottomaksi.
Ja hänen täytyi päästä maahan kiinni. Eihän hän voisi kulkurina

vaimoaankaan elättää.
Keventynein mielin nousi Hannes ylisille. Hänen ei tällä kertaa

tarvinnut pelätä yksinäisyyttä.
Hetkisen valveilla ollen kuuli hän kellokkaan ammunnan

tarhaveräjällä ja lypsäjien matalaa puhetta pihamaalta. Isäntä kuului
käskevän miehiä kesantokynnökselle.
Ne onnelliset saavat askarrella maatyössä, mietti Hannes. Milloin

se aika koittaa minulle?
VII.
Hannes seisoi joen sillalla, nojasi kaiteeseen ja odotti. Vaatemytty oli

siinä hänen vieressään istuinlaudalla.
Talosta kuului ääniä. Kyntäjät siellä palasivat pelloilta ja karjaa

huhuttiin kotiin. Alempana kuului joku pojista aloittavan laulun, mutta
se katkesi vetelään ölinään. Kuumuus rasitti vesien partaallakin.
Nyt näkyi jo kellokas talon karjakujalla.— Missä lienee Hakalan

vanha kellokas, tuli Hannes tahtomattaankin ajatelleeksi, vaikka
tärkeämmät ajatukset olivatkin pyörineet hänen päässään.
Ajatukset viivähtivät nyt jo kokonaan kotitalossa ja palasivat

hetkistä myöhemmin taloon, jonka hän oli nyt jättävä.
Kun olisi voinut jäädä, olisi ehkä piankin saanut ikävöimäänsä

maata. Tyttö oli Jokivarren talossa ainoa perillinen ja isänsä oli
vanha ja raihnainen. Talo olisi tarvinnut miehen, ja isäntä,
hyväntahtoinen vanhus, oli pyytänytkin Hannesta apulaisekseen.
Oliko ehkä huomannut, että tyttärensä viihtyi tarinoimassa hänen
kanssaan.
Maata olisi ollut ja valmis asuntopaikka, vaan se täytyi jättää, sille
ei voinut muuta.
Hannes oli katsellut taloa peltojensa ja koivujensa keskellä. Nyt

sieltä tuli joku ja kääntyi maantielle.
Se on Lyyli, mitä minä voin sanoa hänelle, ajatteli Hannes.
Tyttö tuli ja nojasi hänkin kaiteeseen. Kellertävät, runsaat hiukset

olivat auenneet ja tyttö oli solminnut ne hätäisesti niskaan. Sinisissä
silmissä oli valtava, melkeinpä murheellinen ilme.
Poika tuskin uskalsi katsoa tyttöön. Hän kuuli sydämensä kovat,

tuskaiset lyönnit.
— Sinä siis jätät minut, sanoi tyttö hiljaa.
— Enhän voi muutakaan tällä kertaa. Jos vain voit odottaa, niin
minä tulen kerran, ehkäpä piankin luoksesi, puhui poika.
Hän oli äsken piharakennuksessa puhunut kaikki tytölle, joka oli

vaieten kuunnellut, ripsien raossa kirkkaat pisarat. Tyttö oli tullut nyt
vain häntä saattelemaan alkutaipaleelle.
— Kuulehan Lyyli, ethän ole nyreissäsi minulle, sanoi Hannes

hetken kuluttua. Olisinhan tullut terveeksi sinun hellässä hoidossasi,
mutta sukuvika ei olisi tullut sovitetuksi. Meille, tai oikeastaan minulle
alkaa uusi kirkas tulevaisuus, kun työllä ja ponnistuksilla saan
sovitetuksi sen, minkä vanhempani ovat rikkoneet.
— Mitenkäpä voisin sitä ollakaan, sanoi tyttö leikitellen

irtaantuneella hiussuortuvallaan. Tiedänhän, että yhteisen onnemme
puolesta niin teet kuin hyväksi näet.
He lähtivät kävelemään polkua, joka erosi maantieltä ja luikerteli
männikkö- ja lehtotievojen poikki sydänmaille.
Keventääkseen tytön alakuloiseksi painunutta mieltä leikitteli

Hannes:
— Tätä samaa polkua minä sitten tulen taas myttyineni, niinkuin

kulkuri ainakin, pyytämään Jokivarren komeata tytärtä omakseni.
Mitäs jos annettaisiinkin miehelle rukkaset?
— Ei ole annettu ennenkään eikä vielä vastakaan, naurahti Lyyli.

Eikä Jokivarren tyttö ole komea. Kun et vain sattuisi komeampia
siellä maailmalla löytämään.
— No, siitä ei puhuta. Jos sinä vain odotat, etkä kättä toiselle
käppää.
Tyttö käveli siinä hänen vierellään niin vetävän verevänä.

Yht'äkkiä heitti Hannes myttynsä menemään tielle ja sulki tytön
syliinsä.
— Nyt hyvästi, oma tyttö! Sinä et saa tulla enää. Tiedät, että on
vain vaikeampi minunkin erota. Odota, pian minä tulen.
Tyttö jäi siihen kyyneleisenä ja poika lähti reippaasti astumaan,

heiluttaen vielä tien käänteessä kättään hyvästiksi.
Melkein kuin toinen koti oli jäänyt hänen jälkeensä. Ja

enemmänkin.
Kirkassilmäinen, vaaleahiuksinen tyttö jäi häntä odottamaan.
Miehen astunta kumahteli kangaspolulla. Siinä oli jo

päättäväisyyttä-ja ryhtiä. Ihme, että hän oli jo näinkin pitkälle voinut
päästä itsekasvatuksessaan.
VIII.
Hannes makasi selällään pienen metsälammen rantakalliolla,

vaatemytty päänsä alla. Yksinäiset metsälinnut olivat jo vaienneet ja
hiljaisuutta rikkoi vain silloin tällöin ahvenen pulahdus kaislikossa.
Kallio oli lämmin ja siinä oli mukava levähtää. Ajatuksilta,

painavilta ja kiusaavilta, sai siinä metsälammen rannalla ihmeellisen
rauhan.
Mikä oli saanut ne kaikki karkkoamaan? Jos ajatus pyörähti jälelle

jääneessä, tytössä ja talossa, voi se viipymättä siirtyä mihin vain,
hiljaiseen lammin rantametsään, auerhämyiselle taivaalle, vanhaan
kotitaloon ja tuntemattomaan tulevaisuuteen, mutta mikään niistä ei
kiinnittänyt. Salolammen luonto kokonaisuudessaan tuntui pitävän
kuin kaikkea yllä.
Nuori haapa lipatti siinä melkein korvan juuressa. Salama välähti

läntisellä taivaalla ja ahven pulahti ruohikossa, jalan juuressa. Sitten
ei taas kuulunut muuta kuin sammalen ritinä hengityksestä liikkuvain
hartiain alla.
Ihana erämaan rauha. Kukapa sen suuruutta tajusi muut kuin

saloseudun yksinäinen asukas.
Ei hänkään ollut sitä ennen tällaiseksi huomannut. Oliko tässä
erikoisempaa kuin muulloinkaan jonkun saloseudun rauhaan
pysähtyessä, taisi olla vain ero siinä, että hän voi nyt kaikkea
paremmin tajuta, ottaa vaikutteita vastaan.
Hän olikin ehkä päässyt jo jonkun verran nousemaan

entisyydestään.
Eiköhän sittenkin luonnon alkuperäinen asutus ollut kaikista

kaunein. Kun vaan asujalla oli puuttumaton ravinto. Tällä hetkellä
hän, kulkuri ja sukukirojen alainen, ei olisi kalliolevähdyspaikkaansa
vaihtanut suurkaupungin miljoonapalatsiin. Täältä löysi elämän
terveenä ja koruttomana, mutta palatsien nurkissa viihtyi kuolema.
Mikä risahti?
Hannes nousi katsomaan. Jänö oli puikkinut rantaan ja lipoi vettä

kivenkolosta. Eipä näyttänyt pelkäävän. Rauhallisena painui
asuntopaikoilleen niinkuin olisi nähnyt vertaisensa.
Pilvi lännellä oli kasvanut ja salama leimahti jossain kauempana.

Hannes painui jälleen sammalvuoteelleen ja jäi silmät kiinni
miettimään.
Uni tuli tällä kertaa rauhallisena ja virkistävänä. Ihana saloseudun

rauha kosketti suojelevalla kädellään nukkujaa.
IX.
Suuren konepajan valssit ja puristimet jyskyivät, rakennukset

tärisivät ja sulatusuuneissa hehkui lakkaamaton tuli. Miehet heiluivat
koneellisesti, hikisinä ja tylsin ilmein. Työn iloa ei näkynyt yhdenkään
kasvoilla.
Eräässä hieman syrjemmällä sijaitsevassa pajassa takoi Hannes

kuumeisesti. Pari miestä hääri hänen ympärillään, mutta hänen
ajatuksensa näyttivät pysyvän kokonaan työssä, jota hän suoritti.
Hannes oli työpaikkaa etsiessään asettunut väliaikaisesti suuren

konepajan töihin. Työ ei ollutkaan hänelle aivan outoa. Kotonaan
Hakalassa oli hän suoritellut talossa tarvittavat sepän työt, ja takonut
joskus naapureillekin.
Uutterana miehenä hän sai pian tehtaassa omintakeiset

tehtävänsä ja se sai hänet toistaiseksi jäämään. Johtavan insinöörin
huomiota oli kohta kiinnittänyt miehen erikoinen reippaus, jolla hän
kävi käsiksi työhönsä. Ja kun häneltä oudoinkin työ kävi kohta
helposti ja hän ymmärsi piirustuksia, sai hän pian paikan
malliseppänä.
Hannesta oli ensi alussa kammottanut tehdastyö. Edeltäpäin hän
ei ikinä olisi uskonut voivansa työskennellä tehtaassa. Toisen
maatyöhön hän ei tahtonut ryhtyä ja omaa maata, ei edes torpan
paikkaa, ollut hänen laiselleen kuljeksijalle saatavissa. Kukapa tiesi
hänen hyvistä pyrkimyksistään.
Tehtaaseen tultuaan huomasi hän koneiden ja valssien ryskeessä

jotain omituisesti tenhovaa. Aivan kuin olisi voinut sukukironsa
asettaa väkivasaran alle ja nähdä miten ne murskautuivat. Jokainen
koneiden tärähdys ja vasaran isku jäykisti hänen jänteitään ja hän
tunsi, että hänen oli jäätävä, koskapa hän näin pääsi työhön, johon
sai iskeä koko tarmollaan ja jossa sai jännittää kaikki voimansa.
Lyyli, jolle hän oli kohta ilmoittanut uudesta työalastaan, ei ollut
siihen tyytyväinen. »Olisit koettanut päästä maahan käsiksi, sitähän
sinä kaipasit», oli hän kirjoittanut.
Ehkäpä tyttö ei ymmärtänyt, että hänelle oli juuri tällainen sopivata

toistaiseksi. Mitä enemmän vietit painoivat häntä, sitä rajummin sai
hän työskennellä ja tappaa niitä. Hän nautti melkein siitä, että sai
rääkätä ruumistaan.
Lyylille hän kirjoitti tästä.
»— — — Koneiden ryskeessä on jotain, joka tenhoaa minut. Se

on minulle työn laulua ja vielä paljon enemmän. Minä käyn
lakkaamatonta taistelua paheeni kanssa ja väkivasaroista on tullut
kuin auttavia ystäviä minulle. Yön hetkinä, kun pahat ajatukset ajavat
minua takaa, menen minä näiden ystävieni luokse ja tunnen silloin
aina heiltä saavani apua taistelussani. En millään hinnalla voisi
silloin väkivaltaisesti uhrata elämännesteitä.
Mutta sittenkin. Miksi minä en saa tätä voimain mittelyä suorittaa
maatyössä, omassa työssä? Tämä ajatuskin minua usein kiusaa.
Siellä luonasi olisin saanut tarttua maahan ja olla luonnon terveitten
voimien kanssa tekemisissä, mutta enhän voinut. Minä tahdoin
tutkia, onko minussa yhtään miehuutta, ja ilman sitä tietoa en olisi
koskaan voinut pyytää sinua kokonaan omakseni. Nyt tiedän, että
kerran voin, ehkä piankin. Odota sitä ja kun tulee uusi kevät ja lehti
puhkee puuhun, tulen varmasti silloin minäkin uutena miehenä
luoksesi.»
Hanneksen työvauhtia ihmeteltiin kohta suuren tehdasalueen joka

kolkassa. Työnjohtajat olivat mielissään saatuaan miehen, jonka
työtehosta voivat huomauttaa toisille.
Mutta se teki Hanneksen vihatuksi toisten joukossa. Varsinkin kun

hän ei ottanut osaa mihinkään työväen rientoihin.
Kiroiltiinkin jo hänelle ja uhkailtiin. Mutta se ei yhtään liikuttanut

häntä. Mitäpä hänen tarvitsi kohdistaa huomiotaan muuhun kuin
oman armottoman hirviönsä tappamiseen.
Hän ei ollut päässyt siltä vielä rauhaan. Se vei vielä voiton,

useinkin jättiläiskamppailujen jälkeen, mutta nyt hän ei jäänyt enää
murehtien miettimään tappioitaan, vaan suunnitteli uusia voittoja.
Sellaisen yön jälkeen, jolloin hän oli jäänyt tappiolle, työskenteli

hän kuin jättiläinen. Melkein peläten katselivat toverit häntä ja
insinöörit seurasivat salaperäisen kunnioittavasti hänen rajuja
liikkeitään.
Sukukirous oli kuin jättiläispuristin, joka tahtoi musertaa hänet,

mutta hän tahtoi olla jättiläistä vieläkin voimakkaampi. Ja siinä syntyi
hirvittävä taistelu.
*****
Kuitenkin tunsi Hannes olevansa vieraalla pohjalla. Iltasin, kun

kuumeinen työ oli loppunut ja hän kulki asuntoonsa, kävi se aina yhä
vaativammaksi ja selvemmäksi hänelle.
Miksi et poistu saloille ja rakenna sinne pirttiäsi, jossa ovat

juuresi? Miksi et ota vastaan mitä on tarjolla? Tyttö ja rauhallinen
kotikontu odottavat sinua. Oletko olevinasi viisas, kun uhraat
nuoruutesi vuodet koneiden jyskeessä?
En ole vielä valmis vastaanottamaan, koetti hän rauhoittaa

itseään.
Vielä jonkun aikaa karkaisua ja sitten.
Mutta voisithan voimiasi mi teliä maaemon kimpussa. Voisithan

näyttää miten tähkäpäät saadaan huojumaan siellä, missä kasvaa
vaivaiskoivikkoa.
Mutta kun ei ole omaa maata. Sepä se on.
Kun olisi perintömaa käsissä, aivan omituisena.
*****
Kuukaudet vierähtelivät. Talvi oli mennyt Hannekselta kuin

huomaamatta ohitse.
Lyyli kirjoitti harvoin. Viimeiset kirjeet tuntuivat omituisen kalseilta.

Tyttö tuntui epäilevän hänen taistelunsa todenperäisyyttä.
— Sinä vain kiusaat itseäsi ja minua, kirjoitti hän. Tulisit pian. Minä
en jaksa kauan odottaa.
Mutta jos kerran hän jaksoi, niin miksei tyttökin. Olihan hän
kokonaan toisessa asemassa kuin mies, joka ponnisteli tulevan
polven elämää silmällä pitäen.
Ja Hannes kirjoitti: Odota. Minä tulen ja silloin voin tarjota

menneistä ajoista vapaan käden, miehen käden, joka tietää ohjata
oikeaan suuntaan nuorena särkyneen elämänsä.
Hän jäi odottamaan vastausta, mutta se viipyi kovin kauan.

Työinnossaan ei Hannes sitä huomannutkaan. Hän oli keksinyt
eräänlaisen turpeenhienontajan ja pyytänyt lupaa insinööriltä
pannakseen sen kokoon. Insinöörit pyysivät piirustuksia
nähtäväkseen, mutta niitä ei ollut hänellä. Selitettyään
suunnitelmaansa sai hän kaksi miestä käytettäväkseen ja työtarpeet.
Kaikki sillä ehdolla, että keksintö luovutetaan tehtaalle.
Nyt hän työskenteli entistä kuumeisemmin, ja huomasi päivä

päivältä pääsevänsä lujemmalle pohjalle.
Kun keksintö on valmis, voin minä lähteä Jokivarteen, ajatteli hän.
Hän aikoi tästä kirjoittaa Lyylille, mutta se ylenmääräisessä

ponnistuksessa jäi päivästä päivään. — Pian minä tämän rakkineen
saan kokoon ja silloin heitän hyvästit koko laitokselle.
Insinöörit ajattelivat toista. Heillä oli käytettävänään verraton kyky

ja heidän oli kiinnitettävä se kokonaan liikkeeseen. Mutta kun he
puhuivat loistavasta tulevaisuudesta Hannekselle, hymyili tämä. —
Minun tulevaisuuteni on varmasti loistava, mutta ei täällä, ajatteli
hän. Jokivarressa on saatava kasvamaan kaksi tähkää siellä, missä
ennen on kasvanut yksi.
Eräänä iltana, kun hänen työtoverinsa olivat jo menneet pois ja

hän yksin jäänyt työpajaan, tuli kolme tehtaan työmiestä ja vaati
häntä mukaansa.
— Mihin? kysyi Hannes keskeyttämättä työtään.
— Talolle. Siellä aiotaan antaa sinulle ystävällinen varoitus.
— Mistä?
Hanneksen ääni oli kuin kylmän teräksen.
— Siitäpä, että täällä ei saa yksi tehdä enemmän kuin toinenkaan.

Sinä oletkin jo mielettömällä rehkimiselläsi saanut meidän
työmieskunniamme kärsimään.
— Onko sitä sitten ollut? kysyi Hannes kylmästi.
Miehet tulistuivat.
— Sinä näyt olevan ilmeinen rahapomojen nuoleksija, ja jollet

muuta käytöstäsi, on sinun poistuttava kokonaan tehtaasta.
— Se on vain minun asiani, joka ei kuulu teille. Ja jos minä olen

teidän työmieskunnianne vienyt, niin siitäpähän tiedätte, ettei sitä ole
ollut olemassakaan. Ja nyt suorikaa matkoihinne!
Joku miehistä lähestyi uhkaavasti.
— Sinä tulet nyt talolle!

Mitään enää virkkaamatta tarttui Hannes miestä hartioihin ja heitti
hänet ulos. Toiset seurasivat hänen jälkeensä. Kuului vain synkkää
kiroilua tieltä.
Hetkistä myöhemmin sulki Hannes ovet ja käveli johtajainsinöörin

asunnolle.
Siellä hän tuli kertoneeksi tapahtuman ja insinööri pyysi häntä

jäämään luokseen yöksi.
— Ja sitten luulen huomenna saavani koneen valmiiksi, ilmoitti

Hannes.
Herrat saavat tulla katsomaan.
— Ja ylihuomenna saadaan suorittaa sillä koeajo. Tämähän on

loistavaa.
Me voimme aloittaa jo tulevaksi muokkauskaudeksi koneen
valmistuksen.
— Mutta missäpä koeajon suorittaa, virkkoi Hannes. Nythän on

maaliskuu vasta lopuillaan.
Insinööri naurahti.
— Hakala ei näy tietävänkään, että vuodenajat eivät meille

merkitse mitään. Me voimme suorittaa koeajon vaikkapa
helmikuussa. Rauta-yhtiöllä on suurenmoiset laitokset, joita te ette
vielä kaikkia tunne. Kunhan tulette yhtiömme osakkaaksi, niin
saadaan nähdä yhtä ja toista.
Yhtiön osakkaaksi? Hannes hymähti. Vai sitä herrat

suunnittelivatkin. Olihan ikävää tuottaa hyville miehille pettymystä,
mutta hän asettuisi osakkaaksi erääseen taloon, jossa muuan
kirkassilmäinen tyttö oli jo odottanut kauan häntä.
Pianpa hän tästä jo joutaisikin lähtemään. Olisi vain pitänyt

kirjoittaa Lyylille. Hän olisi siitä tullut varmaankin hyvin iloiseksi.
Mutta olihan somempaa mennä aivan odottamatta.
Jo nyt olikin jo maaliskuu lopuillaan ja huhtikuun perästä tulee

ihana toukokuu, ja hän pääsee kiinni maahan, uutena ihmisenä.
Uskollinen, hyvä Lyyli saa vihdoinkin tuskaisen odotuksen palkan.
X.
Maaliskuun päivä valkeni kirkkaana ja poutaisena. Näytti tulevan

aikainen kevät, koskapa lumet olivat jo aukeilta sulaneet, niin että
maa näkyi paikotellen.
Hanget kantoivat metsissä. Hannes oli noussut varhain ja lähtenyt

kävelemään aukeamain poikki metsään.
Taivas oli keväisen kirkas ja hanki helisi askelten alla. Ehkä jo

seuraavana päivänä hän pääsisi lähtemään. Ensin olisi ikävä
rautatiematka, mutta sitten hän oikaisisi lopun matkasta suoraan
keväthankia. Olisi ihanaa päästä aamuvarhaisella Jokivarteen. Lyyli
voi olla lypsylle menossa, kun hän ilmestyy pihaan. Hän ilostuu,
juoksee vastaan…
Hannes oli kiivennyt läheisen vaaran laelle, johon näkyi koko

tehdasseutu ja suuri kylä. Sitä hän ei ensin huomannutkaan, katse
lensi kauemmas, peninkulmien taa pohjoiseen.
Hannes istui kaatuneen puun tyvelle. Hänestä tuntui ihmeelliseltä

kuluneet kuukaudet. Oliko hän todellakin sama mies, joka lähti
autioksi käyneestä Hakalasta ja oleksi milloin missäkin ja pysähtyi
vihdoin tänne? Elämä alkoi vähitellen tuntua kokonaan uudelta.

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Financial Accounting 9th Edition Libby

Reporting and Interpreting Property, Plant, and Equipment; Intangibles; and

True / False Questions

2. Patents, trademarks, and franchises are examples of tangible assets.

5. An expenditure is capitalized when it is reported as an expense on the income statement.

18. Use of the double-declining-balance method of depreciation results in increasing amounts of

Multiple Choice Questions

A. Land held for investment.

A. An increase in sales revenue.

A. Land, buildings, and natural resources.

37. Which of the following includes only intangible assets?

A. Natural resources, patents, and trademarks.

A. The numerator is net operating income.

• Net sales, $200,000

What is Wilson's fixed asset turnover ratio?

40. Which statement is false?

A. Equipment installation costs.

A. The payment of delinquent property taxes.

A. Total assets increase $350,000.

A. The common stock account increases by $100,000.

Common stock 100,000

Additional paid-in capital 150,000

Common stock 350,000

Common stock 100,000

Additional paid-in capital 250,000

Common stock 370,000

A. Labor and material expenses for construction will increase.

52. Which of the following statements is incorrect?

A. Ordinary repairs and maintenance decrease net income.

A. Replacement of a truck's tires would be a capital expenditure.

A. The financial statements are not affected.

A. Repairing the carpet in the sales department offices.

A. The financial statements are not affected.

58. Which of the following is correct?

A. Net income decreases and total assets decrease.

A. The annual depreciation expense is $6,000.

A. Depreciation expense would have been lower in 2016.

How much is the 2017 depreciation expense?

What is the accumulated depreciation balance as of December 31, 2017?

75. Which of the following statements is correct?

A. Using straight-line depreciation in comparison to an accelerated depreciation method will result in

A. It is similar to the units-of-production depreciation method.

78. Which of the following statements about asset impairment is false?

How much is the asset impairment loss?

A. A debit to a gain account.

A. A gain occurs when the selling price exceeds book value.

Accumulated depreciation xxx

Loss on sale xxx

Gain on sale xxx

Accumulated depreciation xxx

Accumulated depreciation xxx

Loss on sale xxx

Gain on sale xxx

A. Net income decreases and total assets increase.

How much of a gain or loss should Amanda record?

Which of the following statements correctly describes the computer sale?

A. Assets and stockholders' equity both increase by $5,000.