Deposits on machinery not yet received
Idle equipment awaiting sale
Land held for possible use as a future plant site
None of these.
Possesses physical substance
Acquired for resale
Acquired for use
Yields services over a number of years
Possesses physical substance
Acquired for use in operations
Yields services over a number of years
All of these are major characteristics of a plant asset
Depreciated over the period from acquisition to the date the hotel is scheduled to be torn down
Written off as an extraordinary loss in the year the hotel is torn down.
Capitalized as part of the cost of the land
Capitalized as part of the cost of the new hotel
Costs of grading, filling, draining, and clearing
Costs of removing old buildings.
Costs of improvements with limited lives
Special assessments
Grading, filling, draining, and clearing costs.
Street lights, sewers, and drainage systems cost
Private driveways and parking lots.
Assumption of any liens or mortgages on the property
The significance of the cost allocated to the building in relation to the combined cost of the lot and building
The length of time for which the building was held prior to its demolition
The contemplated future use of the parking lot.
The intention of management for the property when the building was acquired
The machinery account
A separate deferred charge account
Miscellaneous tax expense (which includes all taxes other than those on income
Accumulated depreciation--machinery
Current assets
Land improvements
Land
Property and equipment
At the date of acquisition, cost reflects fair market value
Property, plant, and equipment items are always acquired at their original historical cost
Historical cost involves actual transactions and, as such, is the most reliable basis
Gains and losses should not be anticipated but should be recognized when the asset is sold.
Allocated on the basis of lost production.
Eliminated completely from the cost of the asset
Allocated on an opportunity cost basis
Allocated on a pro rata basis between the asset and normal operations.
Materials and labor only
Labor and overhead only
Materials and overhead only
Materials, labor, and overhead
Assets under construction for an enterprise's own use
Assets intended for sale or lease that are produced as discrete projects
Assets financed through the issuance of long-term debt
Assets not currently undergoing the activities necessary to prepare them for their intended use
Assets under construction for a company's own use
Assets that are ready for their intended use in the earnings of the company
Assets that are not currently being used because of excess capacity.
All of these assets qualify for interest cost capitalization
Assets under construction for a company's own use.
Assets that are ready for their intended use in the earnings of the company
Assets that are not currently being used because of excess capacity
All of these assets qualify for interest cost capitalization
The total interest cost actually incurred.
A cost of capital charge for stockholders' equity
That portion of total interest cost which would not have been incurred if expenditures for asset construction had not been made.
That portion of average accumulated expenditures on which no interest cost was incurred.
The asset is substantially complete and ready for its intended use.
No further interest cost is being incurred
The asset is abandoned, sold, or fully depreciated
The activities that are necessary to get the asset ready for its intended use have begun
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.
The amount of interest cost capitalized during the period should not exceed the actual interest cost incurred.
When excess borrowed funds not immediately needed for construction are temporarily invested, any interest earned should be offset against interest cost incurred when determining the amount of interest cost to be capitalized
The minimum amount of interest to be capitalized is determined by multiplying a weighted average interest rate by the amount of average accumulated expenditures on qualifying assets during the period.
8/8
8/12
9/12
11/12
Offset against interest cost incurred during construction
Used to reduce the cost of assets being constructed
Multiplied by an appropriate interest rate to determine the amount of interest to be capitalized
Recognized as revenue of the period
Offset against interest cost incurred during construction
Used to reduce the cost of assets being constructed
Multiplied by an appropriate interest rate to determine the amount of interest to be capitalized
Recognized as revenue of the period
Be written off over the remaining term of the debt
Be accumulated in a separate deferred charge account and written off equally over a 40-year period
Not be written off until the related asset is fully depreciated or disposed of.
None of these.
Interest cost is being incurred.
Expenditures for the assets have been made
The interest rate is equal to or greater than the company's cost of capital.
Activities that are necessary to get the asset ready for its intended use are in progress
Capitalize only the actual interest costs incurred during construction.
Charge construction with all costs of funds employed, whether identifiable or not
Capitalize no interest during construction
Capitalize interest costs equal to the prime interest rate times the estimated cost of the asset being constructed
Exchange of assets with no difference in future cash flows.
Exchange of products by companies in the same line of business with no difference in future cash flows
Exchange of assets with a difference in future cash flows.
Exchange of an equivalent interest in similar productive assets that causes the companies involved to remain in essentially the same economic position
Gains or losses are recognized in their entirely.
A gain or loss is computed by comparing the fair value of the asset received with the fair value of the asset given up.
Only gains should be recognized
Only losses should be recognized
The fair value of the asset given up, and a gain or loss is recognized
The fair value of the asset given up, and a gain but not a loss may be recognized.
The fair value of the asset received if it is equally reliable as the fair value of the asset given up.
Either the fair value of the asset given up or the asset received, whichever one results in the largest gain (smallest loss) to the company
Be reported in the Other Revenues and Gains section of the income statement.
Effectively reduce the amount to be recorded as the cost of the new asset
Effectively increase the amount to be recorded as the cost of the new asset.
Be credited directly to the owner's capital account
The total value of the future payments
The future amount of the future payments
The present value of the future payments
None of these
Par value of the stock
Stated value of the stock
Book value of the stock
Market value of the stock
Total par value of the stock issued.
Total book value of the stock issued
Total liquidating value of the stock issued.
Fair market value of the land
No commercial substance and additional cash is paid.
No commercial substance and additional cash is received
Commercial substance and additional cash is paid
Commercial substance and additional cash is received
A loss when the exchange has no commercial substance.
A gain when the exchange has commercial substance.
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).
Part of a gain when the exchange has no commercial substance and cash is received (cash paid or received is less than 25% of the fair value of the exchange).
Paid-in capital account
Revenue account
Deferred revenue account
All of these.
The nominal cost of taking title to it.
Its market value.
One dollar (since the site cost nothing but should be included in the balance sheet).
The value assigned to it by the company's directors
The useful life of an asset must be increased
The quantity of assets must be increased
The quality of assets must be increased
Any one of these.
Expensed.
Debited to accumulated depreciation
Capitalized in the machine account
Allocated between accumulated depreciation and the machine account.
Payment of an account payable
Retirement of bonds payable
Payment of Federal income taxes
None of these
Repairs that maintain an asset in operating condition
An addition
A betterment
A replacement
Expenditure made to increase the efficiency or effectiveness of an existing asset
Expenditure made to extend the useful life of an existing asset beyond the time frame originally anticipated
Expenditure made to maintain an existing asset so that it can function in the manner intended
Expenditure made to add new asset services
Expensed immediately if it merely extends the useful life but does not improve the quality.
Expensed immediately if it merely improves the quality but does not extend the useful life.
Capitalized if it maintains the machine in normal operating condition
Capitalized if it increases the quantity of units produced by the machine.
An involuntary conversion and the conditions of the disposition are unusual and infrequent in nature.
A sale prior to the completion of the estimated useful life of the asset
The sale of a fully depreciated asset
An abandonment of the asset
Less than current market value
Greater than cost.
Greater than book value
Less than book value
An involuntary conversion may result from condemnation or fire
The gain or loss from an involuntary conversion may be reported as an extraordinary item.
The gain or loss from an involuntary conversion should not be recognized when the enterprise reinvests in replacement assets.
All of these
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