Recent Question

Which of the following non-monetary exchange transactions has commercial substance 1. When an asset acquired through government grants is recorded using the capital approach, a. assets and equity increase by the fair value of the asset. b. assets and liabilities increase by the fair value of the asset. c. assets and equity increase by the cost of the asset. d. assets and liabilities increase by the cost of the asset. 2. Which of t ...

Other / Other 11 May 2016

Improvements are often referred to as betterments and involve the substitution of a better asset TRUE OR FALSE: 1. The fair value of an asset acquired through a government grant can be recorded as deferred revenue and recognized as income over the life of the asset. 2. One way of recognizing a government grant is to deduct the grant from the carrying amount of the assets received from the grant. 3. Costs incurred subsequent to th ...

Other / Other 11 May 2016

What is the amount of interest that should be capitalized by Bass during 2010 Use the following information for questions 1 through 3. On March 1, 2010, Newton Company purchased land for an office site by paying $540,000 cash. Newton began construction on the office building on March 1. The following expenditures were incurred for construction: Date Expenditures March 1, 2010 $ 360,000 April 1, 2010 504,000 May 1, 2010 900,000 ...

Other / Other 11 May 2016

The account Deferred Grant Revenue is classified as S1. Which of the following is the recommended approach to handling interest incurred in financing the construction of property, plant and equipment? a. Capitalize only the actual interest costs incurred during construction. b. Charge construction with all costs of funds employed, whether identifiable or not. c. Capitalize no interest during construction. d. Capitalize interest costs ...

Other / Other 11 May 2016

Which of the following is not a capital expenditure 1. Which of the following is not a capital expenditure ? a. Repairs that maintain an asset in operating condition b. An addition c. A betterment d. A replacement P2. In accounting for plant assets, which of the following outlays made subsequent to acquisition should be fully expensed in the period the expenditure is made? a. Expenditure made to increase the efficiency or effect ...

Other / Other 11 May 2016

Fences and parking lots are reported on the statement of financial position as 1. The cost of land typically includes the purchase price and all of the following costs except a. grading, filling, draining, and clearing costs. b. street lights, sewers, and drainage systems cost. c. private driveways and parking lots. d. assumption of any liens or mortgages on the property. 2. If a corporation purchases a lot and building and subseque ...

Other / Other 11 May 2016

Assets acquired through government grants are generally recorded at fair value. TRUE OR FALSE: 1. When a company acquires an asset through a government grant, the asset's cost is zero so the cost recorded is the direct cost, such as legal fees, incurred. 2. Assets acquired through government grants are generally recorded at fair value. 3. When an asset acquired through a government grant is recorded on the books, equity will increas ...

Other / Other 11 May 2016

What is the amount of interest that should be capitalized by Kimmel during 2010 1. On May 1, 2010, Goodman Company began construction of a building. Expenditures of $120,000 were incurred monthly for 5 months beginning on May 1. The building was completed and ready for occupancy on September 1, 2010. For the purpose of determining the amount of interest cost to be capitalized, the average accumulated expenditures on the building during 20 ...

Other / Other 11 May 2016

Which of the following statements is true regarding capitalization of interest 1. Which of the following statements is true regarding capitalization of interest ? a. Interest cost capitalized in connection with the purchase of land to be used as a building site should be debited to the land account and not to the building account. b. The amount of interest cost capitalized during the period should not exceed the actual interest cost inc ...

Other / Other 11 May 2016

A government grant generally subsidizes a company by transferring resources to that company. TRUE OR FALSE: 1. When a company purchases land with the intention of developing it for a particular use, interest costs associated with those expenditures qualify for interest capitalization. 2. Assets purchased on long-term credit contracts should be recorded at the present value of the consideration exchanged. 3. Companies account for ...

Other / Other 11 May 2016