21. A company purchased a plant asset for $45,000. The asset has an estimated salvage value of $6,000 and an estimated useful life of 10 years. The annual depreciation expense using the straight-line method is equal to $3,900 per year.
22. Revenue expenditures are additional costs of plant assets that materially increase the assets' life or productive capabilities.
23. Ordinary repairs are expenditures that keep assets in normal, good operating condition.
24. Extraordinary repairs are expenditures extending the asset's useful life beyond its original estimate and are capital expenditures because they benefit future periods.
25. Treating capital expenditures of a small dollar amount as revenue expenditures is likely to mislead the users of financial statements.
26. The cost principle requires that an asset be recorded at the cash or cash equivalent amount that was given in exchange for it.
27. If an asset is sold above its book value, the selling company records a loss.
28. Gain or loss on the disposal of an asset is determined by comparing "value given" (book value) to "value received."
29. Natural resources are assets that include standing timber, mineral deposits, oil wells, and gas fields.
30. Amortization is the process of allocating the cost of natural resources to periods when they are consumed.