DeVry ACCT 305 Week 1 QUIZ

 Student Answer:[removed] Maintenance.

[removed] Sales tax.   [removed] Shipping.   [removed] Installation.    

   

1.Question :(TCO 1) The capitalized cost of equipment excludes:

 

2.Question :(TCO 1) Simpson and Homer Corporation acquired an office building on three acres of land for a lump-sum price of $2,400,000. The building was completely furnished. According to independent appraisals, the fair values were $1,300,000, $780,000, and $520,000 for the building, land, and furniture and fixtures, respectively. The initial values of the building, land, and furniture and fixtures would be:

Student Answer: [removed] Option a  [removed] Option b   [removed] Option c   [removed] Option d

 

 

3.Question :(TCO 3) In a nonmonetary exchange of equipment, if the exchange has commercial substance, a gain is recognized if:

Student Answer: [removed] The fair value of the equipment received exceeds the book value of the equipment received.   [removed] The book value of the equipment received exceeds the fair value of the equipment given up.  [removed] The fair value of the equipment surrendered exceeds the book value of the equipment given up.   [removed] None of the above is correct.

 

 

4.Question : (TCO 1) Interest is eligible to be capitalized as part of an asset’s cost, rather than being expensed immediately, when:

Student Answer: [removed] The interest is incurred during the construction period of the asset.   [removed] The asset is a discrete construction project for sale or lease.   [removed] The asset is self-constructed, rather than acquired.  [removed] All of the above are correct.

  

5.Question :(TCO 3) Alamos Co. exchanged equipment and $18,000 cash for similar equipment. The book value and the fair value of the old equipment were $82,000 and $90,000, respectively.     Assuming that the exchange has commercial substance, Alamos would record a gain/(loss) of:

Student Answer: [removed] $26,000.  [removed] $8,000.   [removed] $(8,000).   [removed] $0.