1. Which of the following is not properly classified as property, plant, and equipment?
A. A truck held for resale by an automobile dealership.
B. Land improvement, such as parking lots and fences.
C. Building used as a factory.
D. Land used in ordinary business operations.

2. A characteristic of a plant asset is that it is
A. not currently used in the business but held for future use.
B. held for sale in the ordinary course of the business.
C. used in the operations of a business.
D. intangible.

3. The four subdivisions for plant assets are
A. property, plant, equipment, and land.
B. land, land improvements, buildings, and equipment.
C. furnishings and factures, land, buildings, and equipment.
D. intangibles, land, buildings, and equipment.

4. Metlock, Inc. purchases land for $558000 cash. The clinic assumes $6000 in property taxes due on the land. The title and attorney fees totaled $3000. The clinic had the land graded for $7600. What amount does Matlock, Inc. record as the cost for the land?
A. $550000
B. $565600
C. $574600.
D. $567000.

5. Marigold Corp. purchased land for a new parking lot for $134000. The paving cost $160000 and the lights to illuminate the new parking area cost $51000. Which of the following statements is true with respect to these additions?
A. $294000 should be added to the Land account.
B. $345000 should be added to Land Improvements.
C. $345000 should be added to the Land account.
D. $211000 should be added to Land Improvements.

6. Ivanhoe Company purchases a new delivery truck for $41000. The sales taxes are $2400. The logo of the company is painted on the side of the truck for $1200. The truck’s annual license is $360. The truck undergoes safety testing for $250. What does Ivanhoe record as the cost of the new truck?
A. $43400.
B. $43650.
C. $45210.
D. $44850.

7. Depreciation is the process of allocating the cost of a plant asset over its useful life in a(n)
A. accelerated and accurate manner.
B. conservative market-based manner.
C. equal and equitable manner.
D. systematic and rational manner.

8. The book value of an asset is equal to the
A. replacement cost of the asset.
B. blue book value relied on by secondary markets.
C. asset’s fair value less its historical cost.
D. asset’s cost less accumulated depreciation.

9. Equipment with a cost of $550000 has an estimated salvage value of $48000 and an estimated life of 4 years or 12000 hours. It is to be depreciated by the straight-line method. What is the amount of depreciation for the first full year, during which the equipment was used 3000 hours?
A. $137500.
B. $141500.
C. $149500.
D. $125500.

10. Indigo Corporation bought equipment on January 1, 2022. The equipment cost $270000 and had an expected salvage value of $55000. The life of the equipment was estimated to be 6 years. The depreciable cost of the equipment is
A. $55000.
B. $270000
C. $215000
D. $35833.