Question 1 Which of the following statements regarding the acquisition of PP&E is false? Answers: For a self constructed asset, capitalized interest can exceed actual interest cost. If a long-lived asset is acquired and will be paid over a number of years, the time value of money should be considered. The general rule of PP&E valuation is to value the asset received at the fair market value of what was given up. The acquisition cost of land should include all things that prepared it for it's use including excavation. Question 2 In interest capitalization related to self constructed assets, all of the following must occur before the capitalization window begins except Answers: Expenditures for the assets have been incurred Depreciation of the asset being built has been recognized Activities that are necessary to get the asset ready for its intended use are in progress. Interest has to be incurred

Question 1 Which of the following statements regarding the acquisition of PP&E is false? Answers: For a self constructed asset, capitalized interest can exceed actual interest cost. If a long-lived asset is acquired and will be paid over a number of years, the time value of money should be considered. The general rule of PP&E valuation is to value the asset received at the fair market value of what was given up. The acquisition cost of land should include all things that prepared it for it's use including excavation. Question 2 In interest capitalization related to self constructed assets, all of the following must occur before the capitalization window begins except Answers: Expenditures for the assets have been incurred Depreciation of the asset being built has been recognized Activities that are necessary to get the asset ready for its intended use are in progress. Interest has to be incurred

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter19: Corporations: Distributions Not In Complete Liquidation

Section: Chapter Questions

Problem 9DQ

See similar textbooks

Similar questions

Fair value as a method of asset measurement is defined as: Multiple Choice O O the cost of an asset adjusted for the depreciation or amortization accumulated over its lifetime. price that would be received to sell assets in an orderly transaction between market participants on a given date. the net amount of cash into which an asset could be converted in the ordinary course of business. the value of what is given in exchange for the asset at its initial acquisition.
Which of the following statements is false? A.For a self constructed asset, capitalized interest should never exceed actual interest cost. B.A loss on exchange will always be recognized regardless of commercial substance. C.The cost to build an addition to an existing building should be expensed immediately. D.If a long-lived asset is acquired and will be paid over a number of years, the time value of money should be considered.
In a replacement analysis, the market value of the currently owned asset a. does not impact the cash flows of the replacement asset(s) in the opportunity cost approach b. does not impact the cash flows of the current asset in the cash flow approach if the current asset is kept c. is treated as a salvage value for the current asset in the cash flow approach if the current asset is kept d. is added to the first cost of the replacement asset(s) in the opportunity cost approach.
An entity that acquires an intangible asset may use the revaluation modelfor subsequent measurement only if A. The useful life of the intangible asset can be reliably determined.B. An active market exists for the intangible asset.C. The cost of the intangible asset can be measured reliably.D. The intangible asset is a monetary asset.
which of the following statements in relation to the cost of the asset is true? A. all of the statements are true B. The cost includes cash equivalent paid C. The cost includes the fair value of any non monetary consideration given to acquire an asset D. The cost includes nonrefundable purchase taxes
1. It is a depreciation method based on the assumption that the value of a property is directly proportional to its age. a. Straight Line Method b. Sinking Fund Method c. Declining Balance Method d. Service Output Method 2. Which of the following is NOT a requirement of a depreciation method? a. It should be simple b. It should recover the capital c. BIR approved d. The book value should be higher than the market value 3. The decrease in the purchasing power of money a. Devaluation b. Depreciation c. Inflation d. Depletion
What is the nature of the recoverability test for indefinite-life intangible assets? Group of answer choices There is no recoverability test for indefinite-life intangible assets. Is the carrying value of the asset greater than the sum of future discounted cash flows generated by the asset? Is the carrying value of the asset greater than the fair value of the asset? Is the carrying value of the asset greater than the sum of undiscounted future cash flows generated by the asset?
Which of the following amounts would be used in calculating a lessee's right of use asset (ROU)? ) O Estimated Salvage Value O Market Value of the Asset O Unguaranteed Residual Value Bargain Purchase Option
If a company buys an intangible asset, it can only utilize the revaluation model to evaluate the asset's value later on.
LO1 The purpose of depreciation is to (a) spread the cost of an asset over its useful life. (b) show the current market value of an asset. (c) set up a reserve fund to purchase a new asset. (d) expense the asset in the year it was purchased.
If a company purchases a limited-life intangible asset, they _____________ amortize the asset and they should test the asset for impairment using_______________ a.) should; the recoverability test and then the fair value test. b.) should not; the fair value test only. c.) should; the fair value test only. d.) should not; the recoverability test and then the fair value test.
What is proper time or time period over which to match the cost of an intangible asset with revenues if it is likely that the benfit of the asset will last fro an indefinite period? a. 40 yrs b. 50 yrs c. immediately d. at such time as reduction in value can be quantitatively determined e. either a or b f. none from the choices given