Question Details

Accounting recognition should be given to some or all of the gain realized 




P1.	Ringler Corporation exchanges one plant asset for a similar plant asset and gives cash in the exchange. The exchange is not expected to cause a material change in the future cash flows for either entity. If a gain on the disposal of the old asset is indicated, the gain will
a.	be reported in the Other Revenues and Gains section of the income statement.
b.	effectively reduce the amount to be recorded as the cost of the new asset.
c.	effectively increase the amount to be recorded as the cost of the new asset.
d.	be credited directly to the owner's capital account.
	2.	Plant assets purchased on long-term credit contracts should be accounted for at
a.	the total value of the future payments.
b.	the future amount of the future payments.
c.	the present value of the future payments.
d.	none of these.

	3.	When a plant asset is acquired by issuance of common stock, the cost of the plant asset is properly measured by the
a.	par value of the stock.
b.	stated value of the stock.
c.	book value of the stock.
d.	market value of the stock.

	4.	When a closely held corporation issues preferred stock for land, the land should be recorded at the
a.	total par value of the stock issued.
b.	total book value of the stock issued.
c.	total liquidating value of the stock issued.
d.	fair market value of the land.

	5.	Accounting recognition should be given to some or all of the gain realized on a nonmonetary exchange of plant assets except when the exchange has
a.	no commercial substance and additional cash is paid.
b.	no commercial substance and additional cash is received.
c.	commercial substance and additional cash is paid.
d.	commercial substance and additional cash is received.





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