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

(Appendix 1) ABC Inc.purchased a shopping complex and with it,a large condominium complex attached to it in the amount of $20,000,000 on January 1,2013.Both complexes are designated investment property.Both facilities are estimated to have a useful life of eighteen years and a salvage value of $2 million dollars.On December 31^st,2013,the fair value of both complexes was $25 million.ABC Inc.prepares its financial statements under IFRS.Assuming that ABC uses the Fair Value Model to account for the complex,the amount of amortization expense to be recorded on ABC's 2013 financial statements would be:

(Multiple Choice)

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Question 21

Goodwill is the premium above fair market value that a company is willing to pay for an acquired company's superior earnings potential.

(True/False)

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Question 22

Land improvements such as paving,fencing,and lighting should be debited in full to the land account.

(True/False)

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Question 23

Shimoon Co.has recently accepted the proposal from the Townshi of Cane that publicly owned property with a warehouse located on it will be donated to Shimoon if Shimoon will build a branch plant in Cane.The appraised value of the land is $520,000 and of the warehouse is $1,286,000. Prepare the journal entry for this transaction:

(Essay)

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Question 24

Negative goodwill arises when one company purchases the net assets of another company for an amount less than their fair market value,and is recorded as a gain on the statement of income/comprehensive income.

(True/False)

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Question 25

City Y sets property valuations for tax assessment purposes low in relation to economic values but are reasonably proportionate among different properties.PQ bought improved property in City Y for $40,000 cash.It consisted of land assessed at $6,000,and a building assessed at $10,000.On PQ's books,the land should be valued at $__ and the building at $.

(Essay)

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(93)

Question 26

TZ acquired a machine and gave 10 instalment notes of $2,000 each.One note matures on the last day of each of the next 10 semi-annual periods.No interest was specified on the notes or the purchase contract.The going rate of interest for such transactions was 20 percent per annum.The cost of the new machine should be recorded by TZ as (rounded to the nearest dollar):

(Multiple Choice)

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(80)

Question 27

Biological Assets may be classified as Property,plant and equipment or as inventory.

(True/False)

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Question 28

Idle land is least likely to be classified in property,plant and equipment.

(True/False)

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Question 29

VC purchased a machine for use in operations at a quoted price of $35,120.Full payment was cash of $8,000,plus a two-year non-interest-bearing note for $27,121.The market rate of interest for this note is 8 percent.VC should record the cost of the machine as (rounded to the nearest dollar):

(Multiple Choice)

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Question 30

A purchased patent has a remaining legal life of 15 years.It should be:

(Multiple Choice)

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Question 31

On January 1,2014,Harris Company bought a machine on a $30,000,14 percent,3-year note payable.The note will be paid in six equal semi-annual payments starting June 30,2001.CS should record the cost of the machine as $30,000:

(True/False)

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(81)

Question 32

A firm received services that qualify as a donation.The recognition of the donation has what effect on income?

(Multiple Choice)

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Question 33

ABC Inc.is a public entity which applies the Fair Value Model to all of its Investment property.On January 1,Year 1,the company purchased Land held for resale for $120,000.This land was independently appraised at $100,000 on December 31^st,Year 1.The year-end adjusting journal entry would include:

(Multiple Choice)

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(66)

Question 34

Assume that a company shares are issued as consideration for equipment acquired.If there is no active market for the shares,the equipment and shares will initially both be recorded at the fair market value of the equipment.An exchange such as this one lacks commercial substance.

(True/False)

4.9/5

(75)

Question 35

MC exchanged one of its milling machines,which had cost $60,000 and on which amortization of $50,000 had been recorded for a smaller milling machine with a firm cash asking price of $14,000.MC received a cash difference (boot) of $6,000. (A) Give the entry on MC's books to record the exchange. (B) Refer to the data given immediately above.Assume the same facts,except that MC paid cash boot of $6,000.Record the exchange on MC's books.

(Essay)

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(82)

Question 36

ER received a building as a donation at no cost,except for transfer costs and some ordinary repair costs.The company agreed to start operations within one year with an expected payroll for 1,000 employees.The preferred financial accounting at the transfer date is for ER to:

(Multiple Choice)

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Question 37

Non-monetary exchanges should be valued using the book value method when two companies engage in an exchange of similar assets.

(True/False)

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Question 38

Under IFRS,which of the following assets need not be disclosed separately on the face of the financial statements?

(Multiple Choice)

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(77)

Question 39

Non-monetary assets,when exchanged,may be valued in excess of their fair market values.

(True/False)

4.9/5

(96)

Question 40

Showing 21 - 40 of 191

Goodwill is the premium above fair market value that a company is willing to pay for an acquired company's superior earnings potential.

Land improvements such as paving,fencing,and lighting should be debited in full to the land account.

Negative goodwill arises when one company purchases the net assets of another company for an amount less than their fair market value,and is recorded as a gain on the statement of income/comprehensive income.

Biological Assets may be classified as Property,plant and equipment or as inventory.

Idle land is least likely to be classified in property,plant and equipment.

VC purchased a machine for use in operations at a quoted price of $35,120.Full payment was cash of $8,000,plus a two-year non-interest-bearing note for $27,121.The market rate of interest for this note is 8 percent.VC should record the cost of the machine as (rounded to the nearest dollar):

A purchased patent has a remaining legal life of 15 years.It should be:

On January 1,2014,Harris Company bought a machine on a $30,000,14 percent,3-year note payable.The note will be paid in six equal semi-annual payments starting June 30,2001.CS should record the cost of the machine as $30,000:

A firm received services that qualify as a donation.The recognition of the donation has what effect on income?

ABC Inc.is a public entity which applies the Fair Value Model to all of its Investment property.On January 1,Year 1,the company purchased Land held for resale for $120,000.This land was independently appraised at $100,000 on December 31^st,Year 1.The year-end adjusting journal entry would include:

Assume that a company shares are issued as consideration for equipment acquired.If there is no active market for the shares,the equipment and shares will initially both be recorded at the fair market value of the equipment.An exchange such as this one lacks commercial substance.

ER received a building as a donation at no cost,except for transfer costs and some ordinary repair costs.The company agreed to start operations within one year with an expected payroll for 1,000 employees.The preferred financial accounting at the transfer date is for ER to:

Non-monetary exchanges should be valued using the book value method when two companies engage in an exchange of similar assets.

Under IFRS,which of the following assets need not be disclosed separately on the face of the financial statements?

Non-monetary assets,when exchanged,may be valued in excess of their fair market values.

The Framework for Financial Reporting

Accounting Judgements

Statements of Income and Comprehensive Income

Statements of Financial Position and Changes in Equity; Disclosure Notes

The Statement of Cash Flows

Financial Assets: Cash and Receivables

Cost-Based Inventories and Cost of Sales

Depreciation,Amortization,and Impairment

Financial Instruments: Investments in Debt and Equity Securities

Filters

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

Goodwill is the premium above fair market value that a company is willing to pay for an acquired company's superior earnings potential.

Land improvements such as paving,fencing,and lighting should be debited in full to the land account.

Negative goodwill arises when one company purchases the net assets of another company for an amount less than their fair market value,and is recorded as a gain on the statement of income/comprehensive income.

Biological Assets may be classified as Property,plant and equipment or as inventory.

Idle land is least likely to be classified in property,plant and equipment.

VC purchased a machine for use in operations at a quoted price of $35,120.Full payment was cash of $8,000,plus a two-year non-interest-bearing note for $27,121.The market rate of interest for this note is 8 percent.VC should record the cost of the machine as (rounded to the nearest dollar):

A purchased patent has a remaining legal life of 15 years.It should be:

On January 1,2014,Harris Company bought a machine on a $30,000,14 percent,3-year note payable.The note will be paid in six equal semi-annual payments starting June 30,2001.CS should record the cost of the machine as $30,000:

A firm received services that qualify as a donation.The recognition of the donation has what effect on income?

ABC Inc.is a public entity which applies the Fair Value Model to all of its Investment property.On January 1,Year 1,the company purchased Land held for resale for $120,000.This land was independently appraised at $100,000 on December 31st,Year 1.The year-end adjusting journal entry would include:

Assume that a company shares are issued as consideration for equipment acquired.If there is no active market for the shares,the equipment and shares will initially both be recorded at the fair market value of the equipment.An exchange such as this one lacks commercial substance.

ER received a building as a donation at no cost,except for transfer costs and some ordinary repair costs.The company agreed to start operations within one year with an expected payroll for 1,000 employees.The preferred financial accounting at the transfer date is for ER to:

Non-monetary exchanges should be valued using the book value method when two companies engage in an exchange of similar assets.

Under IFRS,which of the following assets need not be disclosed separately on the face of the financial statements?

Non-monetary assets,when exchanged,may be valued in excess of their fair market values.

The Framework for Financial Reporting

Accounting Judgements

Statements of Income and Comprehensive Income

Statements of Financial Position and Changes in Equity; Disclosure Notes

The Statement of Cash Flows

Financial Assets: Cash and Receivables

Cost-Based Inventories and Cost of Sales

Depreciation,Amortization,and Impairment

Financial Instruments: Investments in Debt and Equity Securities

Filters

ABC Inc.is a public entity which applies the Fair Value Model to all of its Investment property.On January 1,Year 1,the company purchased Land held for resale for $120,000.This land was independently appraised at $100,000 on December 31^st,Year 1.The year-end adjusting journal entry would include: