DeVry ACCT 305 Week 4 MIDTERM

 1.

Question :

(TCO 1) The acquisition costs of property, plant, and equipment do not include:

Student Answer:

[removed]The ordinary and necessary costs to bring the asset to its desired condition and location for use.

[removed] The net invoice price.

[removed] Legal fees, delivery charges, installation, and any applicable sales tax.

Maintenance costs during the first 30 days of use.

 2.

Question :

(TCO 3) Below are data relative to an exchange of similar assets by Grand Forks Corp. Assume the exchange has commercial substance.

 
 In Case A, Grand Forks would record the new equipment at:

 3.

Question :

(TCO 2) The exclusive right to benefit from a creative work, such as a film, is a:

 4.

Question :

(TCO 4) Assuming an asset is used evenly over a four-year service life, which method of depreciation will always result in the largest amount of depreciation in the first year?

 5.

Question :

 (TCO 4) On September 30, 2011, Bricker Enterprises purchased a machine for $200,000. The estimated service life is 10 years with a $20,000 residual value. Bricker records partial-year depreciation based on the number of months in service.  Depreciation for 2011, using double-declining balance, would be: 

 6.

Question :

(TCO 4) Accounting for a change in the estimated service life of equipment:

 7.

Question :

(TCO 5) The investment category for which the investor's "positive intent and ability to hold" is important is:

 8.

Question :

(TCO 5) Consolidated financial statements are prepared when one company has:

.

 9.

Question :

(TCO 4) Interest may be capitalized:

rred.

 10.

Question :

(TCO 2) Software development costs are capitalized if they are incurred:

 11.

Question :

(TCO 4) The factors that need to be determined to compute depreciation are an asset's:

 12.

Question :

(TCO 5) Which of the following types of securities only includes debt securities?

 13.

Question :

(TCO 1) The capitalized cost of land excludes:

 14.

Question :

(TCO 3) When selling property, plant, and equipment for cash:

 15.

Question :

(TCO 2) Research and development (R&D) costs:

 16.

Question :

(TCO 4) The depreciable base for an asset is:

 17.

Question :

(TCO 5) Trading securities are most commonly found in the books of:

 19.

Question :

(TCO 5) When using the equity method to account for an investment, cash dividends received by the investor from the investee should be recorded:

 1.

Question :

(TCO 2) Briefly explain the differences between U.S. GAAP and International Financial Reporting Standards in accounting for research and development expenditures other than software development costs.

 2.

Question :

(TCO 5) Discuss the following questions. 

What securities must be classified within one of the three categories of held-to-maturity, available-for-sale, and trading? (Do not describe how to determine how securities are classified among these three categories.) Identify the four primary recording activities related to investments in securities.

 3.

Question :

(TCO 1) Please distinguish between tangible operational assets and intangible assets. Provide three examples of each.

 4.

Question :

(TCO 4) Briefly differentiate between activity-based and time-based allocation methods.