Question 1

Plant assets may properly include:

Accepted Answer

A) property held for investment purposes. 
B) land held for possible use as a future plant site. 
C) deposits on machinery purchased and not yet received. 
D) idle equipment awaiting sale. 
E) self-constructed assets currently in use. 
A) property held for investment purposes. 
B) land held for possible use as a future plant site. 
C) deposits on machinery purchased and not yet received. 
D) idle equipment awaiting sale. 
E) self-constructed assets currently in use.

Question 2

A firm acquired used equipment on January 1st,2014 by issuing a note calling for four equal payments to be made each December 31 starting in 2014.The note's principal value equals the negotiated price of $40,000,and the interest rate implied in the note is consistent with the market rate of interest for this level of risk (8%).What is the net present value of the note payable as on January 1st,2014?

Accepted Answer

A) $11,182 
B) $12,077 
C) $10,987 
D) $37,037 
A) $11,182 
B) $12,077 
C) $10,987 
D) $37,037

Question 3

Company B acquired a capital asset,terms 1 percent discount if paid within 30 days.The invoice cost was $5,000.The asset should be recorded by Company B at:

Accepted Answer

A) $4,950 if this is the amount of cash paid. 
B) $5,000 if this is the amount of cash paid. 
C) $4,950 regardless of whether the discount is taken. 
D) $5,000 regardless of whether the discount is taken. 
A) $4,950 if this is the amount of cash paid. 
B) $5,000 if this is the amount of cash paid. 
C) $4,950 regardless of whether the discount is taken. 
D) $5,000 regardless of whether the discount is taken.

Question 4

On January 1,2015,The Bargain Bin owned capital asset X that was reflected in the accounts as follows: Cost,$20,000; accumulated amortization,$15,000.The company acquired capital asset Y that had a nonnegotiable actual cash price of $10,750.In full payment,Asset X was traded in and cash of $6,000 was paid by The Bargain Bin.
Give the journal entry required for The Bargain Bin under each of the two independent assumptions:
Assumption A-Similar assets.
Assumption B-Dissimilar assets.

Accepted Answer

Assumption A - Simil

Question 5

When a non-interest bearing note is issued as consideration for equipment acquired,the equipment will initially be recorded at the present value of the note payable.

Accepted Answer

A) True 
 B)False

Question 6

The cost incurred to enhance the service potential of a capital asset is betterment and should be expensed immediately.

Accepted Answer

A) True 
 B)False

Question 7

On September 1,2013,SI exchanged 2,000 shares of its common shares for a parcel of land to be held for a future plant site.SI's common shares had a fair market value of $80 per share on September 1,2013.(Based on several recent large trading volumes.) SI received netted $9,000 from the demolition of an existing building on the site.The book value of the land acquired is:

Accepted Answer

A) $169,000. 
B) $120,000. 
C) $151,000. 
D) $160,000. 
A) $169,000. 
B) $120,000. 
C) $151,000. 
D) $160,000.

Question 8

In the case of exchanges of both similar and dissimilar assets,the asset acquired should never be recorded at an amount that is more than its market value.

Accepted Answer

A) True 
 B)False

Question 9

Only purchased Goodwill is recognized on the financial statements.

Accepted Answer

A) True 
 B)False

Question 10

Asset A,owned by LC,had a book value of $8,000 at 12/31/2011.At that time,LC exchanged Asset A and $50,000 cash with AE for Asset B The market value of Asset A and the asking price of Asset B were $13,000 and $77,000, respectively, at 12/31/11.Assuming that these assets were dissimilar in nature, at what amount should Asset B be recorded by LC?

Accepted Answer

A) $50,000 
B) $58,000 
C) $63,000 
D) $77,000 
A) $50,000 
B) $58,000 
C) $63,000 
D) $77,000

Question 11

Under the fair value model,buildings must be depreciated over their useful lives.

Accepted Answer

A) True 
 B)False

Question 12

Early in January,2000,Vars Co.purchased a patent for a new consumer product for $540,000.At the time of the purchase,the patent was valid for fifteen years.Due to the competitive nature of the product,however,the patent was estimated to have a useful life of only 10 years.During 2004,the product was permanently removed from the market under governmental order because of a potential health hazard present in the product.Calculate the amount Vars should charge to expense in 2004,assuming amortization is only recorded at the end of the fiscal year.

Accepted Answer

The answer of Early in January,2000,Vars Co.purchased a patent for...

Question 13

Self-constructed assets may never be valued in excess of fair market value,regardless of cost.

Accepted Answer

A) True 
 B)False

Question 14

Ivory has a Model B widget-making machine that originally cost $77,000 (accumulated amortization,$44,000).It has a current market value of $20,000.Ivory exchanged this machine for a similar widget-making machine (a smaller one,Model A) owned by EC.The Model A originally cost $46,000 (accumulated amortization to date,$37,400).It has a current market value of $18,000.Ivory received $10,000 cash on the exchange.Ivory should record the cost of the Model A widget-making machine acquired at:

Accepted Answer

A) $10,000. 
B) $18,000. 
C) $20,000. 
D) $25,000. 
A) $10,000. 
B) $18,000. 
C) $20,000. 
D) $25,000.

Question 15

For some purposes,assets are classified as identifiable and unidentifiable.Which of the following is an unidentifiable asset?

Accepted Answer

A) Goodwill 
B) Patent 
C) Cash in a foreign bank 
D) Prepaid insurance 
A) Goodwill 
B) Patent 
C) Cash in a foreign bank 
D) Prepaid insurance

Question 16

What is the general principle for capitalizing costs to property,plant and equipment?

Accepted Answer

A) All costs, which will provide a benefit beyond one year, are capitalized. 
B) Only depreciable costs are capitalized. 
C) All costs associated with the acquisition or construction of a plant asset are capitalized. 
D) All costs incurred to bring the item to its intended condition and location are capitalized. 
E) All costs relevant to the acquisition and long-term maintenance of a plant asset are capitalized. 
A) All costs, which will provide a benefit beyond one year, are capitalized. 
B) Only depreciable costs are capitalized. 
C) All costs associated with the acquisition or construction of a plant asset are capitalized. 
D) All costs incurred to bring the item to its intended condition and location are capitalized. 
E) All costs relevant to the acquisition and long-term maintenance of a plant asset are capitalized.

Question 17

Strong Co.purchased a trademark from Wall Co.for $60,000 on July 1,2000.Expenditures of $10,000 for successful litigation in defence of the trademark were paid on July 1,2002.Strong estimates that the useful life of the trademark will be 20 years from the date of acquisition.
Calculate the carrying value of the trademark at December 31,2002.

Accepted Answer

The answer of Strong Co.purchased a trademark from Wall Co.for...

Question 18

XZ owned Asset A that was reflected in the accounts as: cost,$30,000 and accumulated amortization,$20,000.Its market value in present condition is reliably estimated to be $12,000.XZ acquired Asset B (a similar asset) that had a firm cash price of $16,000.The asset acquired (B) was paid for by trading in Asset A and paying cash of $8,000.
Give the entry XZ should make to record this transaction.

Accepted Answer

@#IMG-DLM& (the new asset's re

Question 19

A firm received an asset as a donation from a shareholder.However,the shareholder imposed a condition to be met before title transfers to the firm.The firm will be unable to meet the condition during the current fiscal year.How should the firm account for this donated asset?

Accepted Answer

A) Debit a liability 
B) No recognition is necessary until the condition is met 
C) Credit revenue 
D) Credit a liability 
A) Debit a liability 
B) No recognition is necessary until the condition is met 
C) Credit revenue 
D) Credit a liability

Question 20

Which of the following would Bezel,Inc.capitalize to land?

Accepted Answer

A) Cost to excavate a foundation for a building to be constructed on the land owned by Bezel 
B) Cost to raze an old building owned by Bezel 
C) Cost to raze an old building on land just purchased by Bezel 
D) Cost to pave a parking lot on land owned by Bezel 
A) Cost to excavate a foundation for a building to be constructed on the land owned by Bezel 
B) Cost to raze an old building owned by Bezel 
C) Cost to raze an old building on land just purchased by Bezel 
D) Cost to pave a parking lot on land owned by Bezel

Plant assets may properly include:

Company B acquired a capital asset,terms 1 percent discount if paid within 30 days.The invoice cost was $5,000.The asset should be recorded by Company B at:

When a non-interest bearing note is issued as consideration for equipment acquired,the equipment will initially be recorded at the present value of the note payable.

The cost incurred to enhance the service potential of a capital asset is betterment and should be expensed immediately.

In the case of exchanges of both similar and dissimilar assets,the asset acquired should never be recorded at an amount that is more than its market value.

Only purchased Goodwill is recognized on the financial statements.

Under the fair value model,buildings must be depreciated over their useful lives.

Self-constructed assets may never be valued in excess of fair market value,regardless of cost.

For some purposes,assets are classified as identifiable and unidentifiable.Which of the following is an unidentifiable asset?

What is the general principle for capitalizing costs to property,plant and equipment?

A firm received an asset as a donation from a shareholder.However,the shareholder imposed a condition to be met before title transfers to the firm.The firm will be unable to meet the condition during the current fiscal year.How should the firm account for this donated asset?

Which of the following would Bezel,Inc.capitalize to land?

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

Plant assets may properly include:

Company B acquired a capital asset,terms 1 percent discount if paid within 30 days.The invoice cost was $5,000.The asset should be recorded by Company B at:

When a non-interest bearing note is issued as consideration for equipment acquired,the equipment will initially be recorded at the present value of the note payable.

The cost incurred to enhance the service potential of a capital asset is betterment and should be expensed immediately.

In the case of exchanges of both similar and dissimilar assets,the asset acquired should never be recorded at an amount that is more than its market value.

Only purchased Goodwill is recognized on the financial statements.

Under the fair value model,buildings must be depreciated over their useful lives.

Self-constructed assets may never be valued in excess of fair market value,regardless of cost.

For some purposes,assets are classified as identifiable and unidentifiable.Which of the following is an unidentifiable asset?

What is the general principle for capitalizing costs to property,plant and equipment?

A firm received an asset as a donation from a shareholder.However,the shareholder imposed a condition to be met before title transfers to the firm.The firm will be unable to meet the condition during the current fiscal year.How should the firm account for this donated asset?

Which of the following would Bezel,Inc.capitalize to land?

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