ACC-302-Ch12-quiz-no-answers

ACC-302-Ch12-quiz-no-answers - ACC 302 Quiz Chapter 12...

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ACC 302 Quiz Chapter 12 Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. ____ 1. Kramer Service Corporation bought a building lot to construct a new corporate office building. An older home on the building lot was razed immediately so that the office building could be constructed. The cost of purchasing the older home should be a. recorded as part of the cost of the land. b. written off as a loss in the year of purchase. c. written off as an extraordinary item in the year of purchase. d. recorded as part of the cost of the new building. ____ 2. In a business combination, goodwill is defined as the excess of cost over the a. fair value of assets acquired. b. fair value of assets acquired less the liabilities assumed. c. book value of assets acquired less the liabilities assumed. d. net book value of assets acquired. ____ 3. Donated equipment for which the fair value has been determined should be recorded as a debit to the appro- priate equipment account and a credit to a. Other Income. b. Retained Earnings. c. Capital Stock. d. Revenue or gain. ____ 4. Nimbus Inc. purchased certain plant assets under a deferred payment contract. The agreement was to pay $30,000 per year for ten years. The plant assets should be valued at a. $300,000. b. $300,000 plus imputed interest. c. present value of $30,000 annuity for ten years at an imputed interest rate. d. future value of $30,000 annuity for ten years at an imputed interest rate. ____ 5. A company purchased land to be used as the site for the construction of a plant. Timber was cut from the building site so that construction of the plant could begin. The proceeds from the sale of the timber should be a. classified as other income.
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ACC-302-Ch12-quiz-no-answers - ACC 302 Quiz Chapter 12...

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