Exam 10: Long-Lived Assets

When the fair value of the asset received in a nonmonetary exchange is more clearly evident than the fair value of the asset(s)given up,the fair value of the asset received is used as the new cost base of the asset.

Generally accepted accounting principles require capitalization of an expenditure when it results in an increase in the economic benefit of an asset.

Amortizable intangible assets include all of the following except

Doggy Co. began construction of a new cutter for the U.S. Coast Guard on January 1, 2014 and completed construction of the ship on October 31, 2015. To finance construction, Doggy took out an $8,000,000, 2-year, 6% construction loan on February 1, 2014. Interest on the loan was to be paid annually on the anniversary date of the loan. Doggy has no other outstanding interest-bearing debt. Doggy made the following expenditures in conjunction with this construction project: Date Amount 2/1/2014 \ 1,050,000 3/31/2014 900,000 6/1/2014 750,000 10/1/2014 1,000,000 12/31/2014 600,000 3/1/2015 900,000 9/1/2015 250,000 -What amount would appear in Doggy's construction in progress account at December 31,2014?

On January 2,2011 Lamp,Inc.purchased a patent for a new consumer product for $120,000.At the time of purchase,the patent was valid for 14 years;however,the patent's useful life was estimated to be only 10 years due to the competitive nature of the product.On December 31,2014 the product was permanently withdrawn from sale under governmental order because of a potential health hazard in the product. Required: a.Record any loss on impairment that Lamp should record in 2014 related to this patent. b.What should the total charge against income be in 2014 on this patent?

Under IFRS,acquired intangibles are always carried at amortized cost even when an active market is available for the intangible.

Current cost is an example of the economic sacrifice approach for valuing long-lived assets.

A major problem facing financial analysts who compare long-lived assets on balance sheets of various companies is that different companies often use different

When an asset's fair value has increased and a firm elects the revaluation method,

When certain kinds of assets are built that require public welfare and safety expenditures at the end of the asset's life,

GAAP for long-lived assets significantly impedes rate-of-return comparisons across companies unless the firms

Research findings almost uniformly indicate that existing GAAP for both R&D and software development is conservative.

How much is the depreciation expense in 2017 if double-declining balance depreciation is used and there is a switch to straight-line in year 2015?

To preclude firms from engaging in "sham" exchanges to generate artificial gains,GAAP requires that the transaction must be approved by the SEC.

The accounting model IFRS permits for long-lived tangible assets is

U.S.GAAP requires that virtually all costs incurred for research and development of an internally generated patent be

Research findings almost uniformly indicate that existing GAAP for both R&D and software development is

IFRS requires that research be expensed but does permit capitalization of some development expenditures.

The Reid Co. acquired a piece of land for a new factory paying $100,000. Reid demolished the old building at a cost of $20,000, and sold scrapped material salvaged from the old building for $5,000. The architect's fees were $25,000, and the title insurance upon acquisition of the land was $1,000. The construction period interest was $8,000, and the contractor received $300,000 for the building. A pavement assessment made by the city cost Reid $2,000 at the purchase date. -The cost of the land recorded by Reid Co.is

How much is the depreciation expense in 2014 if sum-of-years digits depreciation is used?