Exam 10: Investments in Noncurrent Operating Assets-Acquisition

Everheat Company is an oil and gas exploration firm.During 2014,Everheat engaged in five different exploration projects.The costs associated with these projects are as follows: Only Projects 2 and 5 were successful.As of the end of the year,production had not yet started at either of these two sites. Assuming that all exploration costs were paid for in cash,make the journal entry to record the expenditures for the year using

On July 31,2014,Mason Company purchased for $4,000,000 cash all of the outstanding common stock of Turquoise Company when Turquoise's balance sheet showed net assets of $3,200,000.Turquoise's assets and liabilities had fair values different from the book values as follows: As a result of the transaction,what amount will be shown as goodwill in the July 31,2014,consolidated balance sheet of Mason Company and its wholly owned subsidiary,Turquoise Company?

Which of the following intangible assets does NOT have the characteristic of exchangeability?

Song Company started construction on a building on January 1 of this year and completed construction on December 31 of the same year.Song had only two interest notes outstanding during the year,and both of these notes were outstanding for all 12 months of the year.The following information is available: What amount of interest should Song capitalize for the current year?

Place Company started construction of a new office building on January 1,2014,and moved into the finished building on July 1,2015.Of the building's $5,000,000 total cost,$4,000,000 was incurred in 2014 evenly throughout the year.Place's incremental borrowing rate was 12 percent throughout 2014,and the total amount of interest incurred by Place during 2014 was $204,000.What amount should Place report as capitalized interest at December 31,2014?

Donated equipment for which the fair value has been determined should be recorded as a debit to the appropriate equipment account and a credit to

An asset is being constructed for an enterprise's own use.The asset has been financed with a specific new borrowing.The interest cost incurred during the construction period as a result of expenditures for the asset is

Assets constructed for a firm's own use present the of whether to capitalize interest on the funds invested during the time required to prepare the assets for their intended use.Current generally accepted accounting principles as specified by the FASB in Statement No.34 require the capitalization of interest on borrowed capital,but not to exceed the total interest paid by the firm. Evaluate the appropriateness of the approach currently required in the professional pronouncements now in effect.

Torrent Lumber shows the following balances in its financial records: Prepare a partial balance sheet and income statement using the information provided above.

On May 1,2014,Abiuso Corporation purchased for $790,000 a tract of land on which a warehouse and office building were located.The following data were collected concerning the property: Determine the appropriate amounts that Abiuso should record for the land,warehouse,and office building.

An expenditure subsequent to acquisition of assembly-line manufacturing equipment benefits future periods.The expenditure should be capitalized if it is a Betterment Rearrangement

Acquired in-process research and development should be

If the cost of ordinary repairs is capitalized as an addition to the building account during the current year,

The cost of land to be used in the operations of a business should include all of the following except

Tundra Co.incurred research and development costs in 2014 as follows: The total research and development costs charged in Tundra's 2014 income statement should be

A donated plant asset for which the fair value has been determined,and for which incidental costs were incurred in acceptance of the asset,should be recorded at an amount equal to its

Which of the following best describes the proper treatment of cash discounts on acquired machinery?

Which of the following ordinarily would be treated as a revenue expenditure rather than a capital expenditure?

According to the most current FASB standards,intangible assets acquired in a basket purchase which represents the acquisition of an entire business should be