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Prepare the entries on both companies' books assuming that the exchange had commercial substance. Pr. 1—Non-monetary exchange. Beeman Company exchanged machinery with an appraised value of $1,755,000, a recorded cost of $2,700,000 and Accumulated Depreciation of $1,350,000 with Lacey Corporation for machinery Lacey owns. The machinery has an appraised value of $1,695,000, a recorded cost of $3,240,000, and Accumulated Depreciation ...

Other / Other 11 May 2016

Mendenhall Corporation constructed a building 1. During self-construction of an asset by Richardson Company, the following were among the costs incurred: Fixed overhead for the year $1,000,000 Portion of $1,000,000 fixed overhead that would be allocated to asset if it were normal production 60,000 Variable overhead attributable to self-construction 55,000 What amount of overhead should be included in the cost of the self-constructed ...

Other / Other 11 May 2016

Which of the following is not a major characteristic of a plant asset 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. Long-term in nature ...

Other / Other 11 May 2016

What amount of overhead should be included in the cost of the self-constructed asset Use the following information for questions 1–3. La Bianco Company purchased land for a manufacturing facility for €1,100,000. The company paid €70,000 to tear down a building on the land. Salvage was sold for €10,500. Legal fees of €6,500 were paid for title investigation and making the purchase. Architect's fees were â ...

Other / Other 11 May 2016

Companies should assign no portion of fixed overhead to self-constructed assets. TRUE OR FALSE: 1. Variable overhead costs incurred to self-construct an asset should be included in the cost of the asset. 2. Companies should assign no portion of fixed overhead to self-constructed assets. 3. When capitalizing interest during construction of an asset, an imputed interest cost on stock financing must be included. 4. Assets under c ...

Other / Other 11 May 2016

Plant assets purchased on long-term credit contracts should be accounted for at S1. When cash is involved in an exchange having commercial substance. a. gains or losses are recognized in their entirety. b. a gain or loss is computed by comparing the fair value of the asset received with the fair value of the asset given up. c. only gains should be recognized. d. only losses should be recognized. S2. The cost of a non-monetary a ...

Other / Other 11 May 2016

What were the weighted-average accumulated expenditures for 2010 Use the following information for questions 1 through 4. On January 2, 2010, Indian River Groves began construction of a new citrus processing plant. The automated plant was finished and ready for use on September 30, 2011. Expenditures for the construction were as follows: January 2, 2010 $200,000 September 1, 2010 600,000 December 31, 2010 600,000 March 31, 20 ...

Other / Other 11 May 2016

Which of the following costs are capitalized for self-constructed assets 1. Which of the following costs are capitalized for self-constructed assets ? a. Materials and labor only b. Labor and overhead only c. Materials and overhead only d. Materials, labor, and overhead 2. Which of the following assets do not qualify for capitalization of interest costs incurred during construction of the assets? a. Assets under construction for ...

Other / Other 11 May 2016

The cost of the land that should be recorded by Wilson Co. is 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 constru ...

Other / Other 11 May 2016

Insurance on equipment purchased, while the equipment is in transit, is part of the cost of the equipment. TRUE OR FALSE: 1. Assets classified as property, plant, and equipment can be either acquired for use in operations, or acquired for resale. 2. Assets classified as property, plant, and equipment must be both long-term in nature and possess physical substance. 3. When land with an old building is purchased as a future building ...

Other / Other 11 May 2016