Question Details

Which of these costs can Tram capitalize in accordance 




1.	Thomas Company, a company who uses iGAAP reporting standards, is disposing of a plant asset. The amount of gain or loss from this disposal is
a.	reported as the difference between the sales proceeds and the carrying amount of the asset.
b.	not reported.
c.	reported as the market value less the recoverable amount.
d.	reported as the difference between the net cash flows of the productive years of the asset and its carrying value.

2.	On January 1, 2010, Jackson Company has a building with a carrying value of $50,000 and a remaining useful life 5 years that was recently valued at $150,000. Assuming that the company uses straight-line depreciation, iGAAP would show the depreciation as
a.	$10,000
b.	$30,000
c.	$20,000
d.	More than one of these answers could be correct.

3.	Tram Industries, a company who uses iGAAP reporting standards, is installing a new plant. The company has incurred the following costs
1.	Operating losses before commercial production	$    200,000
2.	Cost of the plant	1,500,000
3.	Initial delivery and handling charges	300,000
4.	Cost of site preparation	175,000

	Which of these costs can Tram capitalize in accordance with iGAAP?
a.	1, 2, 3, & 4
b.	2 & 4
c.	2, 3, & 4
d.	1, 2, & 4
4.	Icon Industries, a company who uses iGAAP reporting standards, is installing a new plant. The company has incurred the following costs
1.	Consultants used for advice on the acquisition of the plant	$245,000
2.	Interest charges paid to the supplier of plant for deferred credit	$275,000
3.	Estimated dismantling cost to be incurred after 8 years	$400,000
4.	Cost of the plant	$2,300,000

	Which of these costs can Tram capitalize in accordance with iGAAP?
a.	1, 2, 3, & 4
b.	4 only
c.	1 & 4
d.	1, 3, & 4

5.	All of the following are true regarding the revaluation model allowed under iGAAP except
a.	Once selected, the revaluation policy applies to an entire class of property, plant and equipment.
b.	Revaluations must be made regularly to ensure that the carrying value is not materially different from fair value.
c.	After initial recognition, the revalued amount is fair value less subsequent depreciation and impairment losses.
d.	When an asset is revalued, any increase in carrying amount is reported as miscellaneous revenue.




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