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Unformatted text preview: C HAPTER 12 Investments in Noncurrent Operating AssetsAcquisition M ULTIPLE C HOICE Q UESTIONS Theory/Definitional Questions 1 Items included as part of land costs 2 Definition of intangible asset 3 Goodwill--no characteristic of exchangeability 4 Definition of goodwill in business combination 5 When goodwill should be recorded 6 Treatment of donated equipment 7 Treatment of a donated asset 8 Valuation of plant assets under deferred payment contract 9 Capitalization of interest 10 Capitalization of ordinary repairs--effect on balance sheet accounts 11 Items deducted from land costs 12 Items added to land cost 13 Treatment of donated asset 14 SFAS No. 34--capitalization of interest 15 Capitalization of interest 16 Capitalization of research and development costs 17 Treatment of research and development costs--immediate expense 18 Inclusion of lab building costs as research and development to be capitalized 19 Example of betterment expenditure 20 Treatment of machine improvement--increases capacity 25 percent 21 Treatment of reinstallation costs 22 Capitalization of betterment and rearrangement expenditures 23 Recording noncurrent operating assets at fair value 24 Recording noncurrent operating assets at fair value Computational Questions 25 Computation of recorded costs of factory building 26 Computation of costs assigned to land, buildings, and equipment 27 Computation of costs of three machines 201 202 Chapter 12 Investments in Noncurrent Operating Assets * 28 Computation of purchase price under deferred payment contract 29 Computation of carrying value of land 30 Computation of acquisition cost of machine 31 Computation of total intangible assets to be recorded on balance sheet 32 Computation of goodwill amount 33 Computation of goodwill amount 34 Computation of amount of capitalized interest 35 Computation of amount of capitalized interest 36 Computation of cost of assets not acquired for cash 37 Computation of cost of assets not acquired for cash 38 Computation of capitalized interest 39 Computation of capitalized interest 40 Computation of accumulated expenditures to capitalize interest 41 Computation of research and development expense 42 Computation of research and development expense 43 Computation of repair/maintenance expense 44 Computation of amount of improvements to be capitalized 45 Computation of goodwill amount 46 Computation of fixed asset turnover ratio P ROBLEMS 1 Determine cost of land and buildings 2 Determine appropriate amounts for land, warehouse, and office building 3 Record exchange of stock for machine * 4 Determine acquisition costs of assets 5 Determine amount of capitalized interest 6 Record transactions for research and development, patents, etc....
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- Spring '10