Exam 10: Property, plant, and Equipment and Intangible Assets: Acquisition and Disposition

What disclosures are required relative to interest costs incurred during the year?

Listed below are 10 terms followed by a list of phrases that describe or characterize the terms.Match each phrase with the number for the correct term.

Briefly explain how R&D is reported in financial statements.

In Case A,Grand Forks would record the new equipment at:

What was the final cost of Dreamworld's warehouse?

Champion Industries exchanged a dust-scrubbing piece of equipment for another version of the same type of equipment and received $12,000 cash.The old dust scrubber cost $76,200 and had a book value of $54,500.The new dust scrubber had a fair value of $58,500. Required: Prepare the journal entry to record the exchange.Assume the exchange has commercial substance.

Assuming that the exchange has commercial substance,Alamos would record a gain/(loss)of:

Assets acquired by the issuance of equity securities are valued based on:

Property,plant,and equipment and intangible assets are long-term,revenue producing assets.

The fair value of the asset,debt,or equity securities given in a noncash acquisition should determine the value of the consideration received.

Liddy Corp.began constructing a new warehouse for its operations during the current year.In the year Liddy incurred interest of $30,000 on a working capital loan,and interest on a construction loan for the warehouse of $60,000.Interest computed on the average accumulated expenditures for the warehouse construction was $50,000.What amount of interest should Liddy expense for the year?

In Case A,Pensacola would record the new equipment at:

Use the following to answer questions On June 1,2015,the Crocus Company began construction of a new manufacturing plant.The plant was completed on October 31,2016.Expenditures on the project were as follows ($ in millions): On July 1,2015,Crocus obtained a $70 million construction loan with a 6% interest rate.The loan was outstanding through the end of October,2016.The company's only other interest-bearing debt was a long-term note for $100 million with an interest rate of 8%.This note was outstanding during all of 2015 and 2016.The company's fiscal year-end is December 31. -What is the amount of interest that Crocus should capitalize in 2016,using the specific interest method (rounded to the nearest thousand dollars)?

Cromartie Ltd.prepares its financial statements according to International Financial Reporting Standards.During 2016 the company incurred $1,245,000 in research expenditures to develop a new product.An additional $756,000 in development expenditures were incurred after technological and commercial feasibility was established and after the future economic benefits were deemed probable.The project was successfully completed and the new product was patented before the end of the 2016 fiscal year.Sale of the product began in 2015.What amount of the above expenditures would Cromartie expense in its 2016 income statement?

Research and development costs for projects other than software development should be:

An exclusive 20-year right to manufacture a product or use a process is a:

Montgomery Industries spent $600,000 in 2015 on a construction project to build a library.Montgomery also capitalized $30,000 of interest on the project in 2015.Montgomery financed 100% of the construction with a 10% construction loan.The project was completed on September 30,2016.Additional expenditures in 2016 were as follows: Required: Determine the completed cost of the library.Show supporting computations.

Use the following to answer questions In its 2013 annual report to shareholders,Boston Beer Company,Inc.included the following in a disclosure note: E.Property,Plant and Equipment Property,plant and equipment for the years ended December 28,2013,and December 29,2012,consisted of the following ($ in thousands): The Company recorded depreciation related to these assets of $23,565 thousand in the 2013 fiscal year. Also,Boston Beer reported the following information in the annual report ($ in thousands): -Use a T- account to show the balances and changes during 2013 in Boston Beer's: Property,Plant and Equipment account and its Accumulated depreciation-Property,Plant & Equipment account.

A company that prepares its financial statements according to International Financial Reporting Standards accounts for a government grant by recognizing revenue for the amount of the grant.

The capitalized cost of equipment excludes: