Exam 9: Property,Plant,and Equipment; Intangibles; and Goodwill

In conformity with the historical cost principle,property donated to a corporation should be recorded by the recipient at the cost to the donor.

JB purchased a machine that had a list price of $70,000.JB paid $10,000 cash and signed a one-year non-interest-bearing note for $60,000.In addition,Baker paid 2 percent provincial sales tax on the list price,transportation costs of $150,and installation costs of $200.The going rate of interest is 12 percent.JB Company should record the cost of the machine as (rounded to the nearest dollar):

On December 1,2013,HC acquired a new delivery truck in exchange for an old delivery truck that it had acquired in 2011.The old truck was purchased for $28,000 and had a book value of $11,200.On the date of the exchange,the old truck had a market value of $12,000.In addition,HC paid $14,000 cash for the new truck,which had a cash price of $32,000.At what amount should HC record the new truck for financial accounting purposes?

Apportionment of the purchase price in a lump-sum acquisition of different assets may be based on all of the following except:

An asset should be recorded at cost in conformity with the historical cost principle except:

An exchange of similar assets with no cash involved:

House of Deals Ltd.bought a machine,which had a list price of $20,000 subject to terms of 2/10,net/30. (A) Give the entry to record the acquisition,assuming no cash was paid on acquisition date. (B) Give the entry to record the payment for the machine,assuming payment is made within the 10-day discount period. (C) Give the entry to record the payment for the machine,assuming payment is made after the 10-day discount period.

An old machine with a book value of $20,000 was traded in on a new similar machine.The new machine,which had a cash price of $80,000,was purchased for $62,000 cash plus the old machine.The cost of the new machine was:

On January 1,2013,DB purchased a used cement truck from NC.The carrying value of the truck on NC's books was $12,500.DB paid cash of $2,000 and gave a 2-year note that required semi-annual payments of $4,000 each payable at the end of each semi-annual period (the market rate of interest was 12 percent).A similar truck reportedly was sold recently for $14,000.DB Company should record the cost of the truck as (rounded to the nearest dollar):

Land and buildings held for rent and/or capital appreciation are considered Investment Property under IFRS and may be accounted for using the Fair Value Model.

Training and advertising costs must be expensed under IFRS.