2006 Fall Accounting_011_Fall_2006___final_exam

2006 Fall Accounting_011_Fall_2006___final_exam - Temple...

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Temple University Fox School of Business and Management Dr. Steven Balsam Accounting 011 Final Exam-Answers December 13, 2006 Instructions: You have 150 minutes. Answer the questions on the pages provided and please remember to show all work so that you may receive partial credit. Also please put your name on each page in case the pages get separated. Good luck!
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Name ________________________________ Answer Sheet for Multiple Choice 1. ________________ 2. ________________ 3. ________________ 4. ________________ 5. ________________ 6. ________________ 7. ________________ 8. ________________ 9. ________________ 10. ________________ 11. ________________ 12. ________________ 13. ________________ 14. ________________ 15. ________________ 16. ________________ 17. ________________ 18. ________________ 19. ________________ 20. ________________ 21. ________________ 22. ________________ 23. ________________ 24. ________________ 25. ________________ 26. ________________ 27. ________________ 28. ________________ 29. ________________ 30. ________________ 2
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Name ________________________________ Multiple Choice – 2 points each Use the following information for questions 1 through 3 On March 1, 2004, Fairly Company purchased land for an office site by paying $360,000 cash. Fairly began construction on the office building on March 1. The following expenditures were incurred for construction: Date Expenditures March 1, 2004 $240,000 April 1, 2004 336,000 May 1, 2004 600,000 June 1, 2004 960,000 The office was completed and ready for occupancy on July 1. To help pay for construction, $480,000 was borrowed on March 1, 2004 on a 9%, 3-year note payable. Other than the construction note, the only debt outstanding during 2004 was a $200,000, 12%, 6-year note payable dated January 1, 2004. 1. The weighted-average accumulated expenditures on the construction project during 2004 were a. $256,000. b. $1,956,000. c. $208,000. d. $464,000. 2. The actual interest cost incurred during 2004 was a. $60,000. b. $67,200. c. $33,600. d. $56,000. 3. Assume the weighted-average accumulated expenditures for the construction project are $580,000. The amount of interest cost to be capitalized during 2004 is a. $52,200. b. $55,200. c. $60,000. d. $67,200. 4. When computing the amount of interest cost to be capitalized, the concept of "avoidable interest" refers to a. the total interest cost actually incurred. b. a cost of capital charge for stockholders' equity. c. that portion of total interest cost which would not have been incurred if expenditures for asset construction had not been made. d. that portion of average accumulated expenditures on which no interest cost was incurred. 3
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Name ________________________________ 5. The period of time during which interest must be capitalized ends when a. the asset is substantially complete and ready for its intended use. b.
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2006 Fall Accounting_011_Fall_2006___final_exam - Temple...

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