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A plant site donated by a township to a manufacturer 1. For a nonmonetary exchange of plant assets, accounting recognition should not be given to a. a loss when the exchange has no commercial substance. b. a gain when the exchange has commercial substance. c. part of a gain when the exchange has no commercial substance and cash is paid (cash paid/received is less than 25% of the fair value of the exchange). d. part of a gain when the ...

Other / Other 04 Apr 2016

When funds are borrowed to pay for construction 1. The period of time during which interest must be capitalized ends when a. the asset is substantially complete and ready for its intended use. b. no further interest cost is being incurred. c. the asset is abandoned, sold, or fully depreciated. d. the activities that are necessary to get the asset ready for its intended use have begun. 2. Which of the following statements is true r ...

Other / Other 04 Apr 2016

The exchange lacked commercial substance Ex. 1—Nonmonetary exchange. A machine cost $80,000, has annual depreciation expense of $16,000, and has accumulated depreciation of $40,000 on December 31, 2010. On April 1, 2011, when the machine has a fair value of $32,000, it is exchanged for a similar machine with a fair value of $96,000 and the proper amount of cash is paid. The exchange lacked commercial substance. Instructions Pre ...

Other / Other 04 Apr 2016

Cotton Hotel Corporation recently purchased Emporia Hotel 1. Plant assets may properly include a. deposits on machinery not yet received. b. idle equipment awaiting sale. c. land held for possible use as a future plant site. d. none of these. 2. Which of the following is not a major characteristic of a plant asset? a. Possesses physical substance b. Acquired for resale c. Acquired for use d. Yields services over a number of ye ...

Other / Other 04 Apr 2016

Siegle Company exchanged 400 shares of Guinn Company 1. Horner Company buys a delivery van with a list price of $30,000. The dealer grants a 15% reduction in list price and an additional 2% cash discount on the net price if payment is made in 30 days. Sales taxes amount to $400 and the company paid an extra $300 to have a special horn installed. What should be the recorded cost of the van? a. $24,990. b. $25,645. c. $25,690. d. $25,39 ...

Other / Other 04 Apr 2016

What amount of interest should be charged Use the following information to answer questions 1 - 5. Arlington Company is constructing a building. Construction began on January 1 and was completed on December 31. Expenditures were $2,400,000 on March 1, $1,980,000 on June 1, and $3,000,000 on December 31. Arlington Company borrowed $1,200,000 on January 1 on a 5-year, 12% note to help finance construction of the building. In addition, the ...

Other / Other 04 Apr 2016

Fogelberg Company purchased equipment Use the following information for questions 1 and 2. Wilson Co. purchased land as a factory site for $600,000. Wilson paid $60,000 to tear down two buildings on the land. Salvage was sold for $5,400. Legal fees of $3,480 were paid for title investigation and making the purchase. Architect's fees were $31,200. Title insurance cost $2,400, and liability insurance during construction cost $2,600. Ex ...

Other / Other 04 Apr 2016

Timmons Company traded machinery Use the following information for questions 1 through 2. Two independent companies, Hager Co. and Shaw Co., are in the home building business. Each owns a tract of land held for development, but each would prefer to build on the other's land. They agree to exchange their land. An appraiser was hired, and from her report and the companies' records, the following information was obtained: Hager's Land S ...

Other / Other 04 Apr 2016

Jim Mahan, a new employee of Riggs 1 Jim Mahan, a new employee of Riggs Company, recorded $1,000 in consigned goods received as part of the firm's inventory. The goods were received one day after the end of the fiscal period, but Jim reasoned that the goods should be included in inventory sooner because Riggs paid the freight. The mistake was brought to his attention by the purchasing department who said the goods should not have been re ...

Other / Other 02 Apr 2016

Title to goods transfers when the goods 1. Match the items below by entering the appropriate code letter in the space provided. A. Merchandise Inventory F. First-in, first-out (FIFO) method B. Work in process G. Last-in, first-out (LIFO) method C. FOB shipping point H. Average-cost method D. FOB destination I. Inventory turnover E. Specific identification method J. Current replacement cost 1. Measures the number of times the in ...

Other / Other 02 Apr 2016