Intermediate Accounting Midterm_monimani

Intermediate Accounting Midterm_monimani - 1.

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1. (TCO 1 and TCO 3) The acquisition costs of tangible operational assets do not include (Points: 5)  The ordinary and necessary costs to bring the asset to its desired condition and location for  use.  The net invoice price.  Delivery charges, installation, and any applicable sales tax.   Maintenance costs during the first   thirty days of use.  2. (TCO 1 and TCO 3) Research and development costs:  (Points: 5)  Are always expensed in the period incurred.  May be expensed or capitalized, at the option of the reporting entity.  Must be capitalized and amortized.   Generally pertain to activities that occur prior to the start of production.  3. (TCO 1 and TCO 3) Research and development costs for projects other than software  development should be:  (Points: 5)   Expensed in the period incurred.  Expensed in the period they are determined to be unsuccessful.  Deferred pending determination of success.  Expensed if unsuccessful or capitalized if successful.  4. (TCO 1, TCO 2,TCO 3) Holiday Laboratories purchased a high speed industrial centrifuge at a  cost of $420,000. Shipping costs totaled $15,000. Foundation work to house the centrifuge cost  $8,000. An additional water line had to be run to the equipment at a cost of $3,000. Labor and  testing costs totaled $6,000. Materials used up in testing cost $3,000. The capitalized cost is:   (Points: 5)   $455,000.  $446,000.  $437,000.  $435,000.  Cost $420,000 + shipping 15,000 + foundation work 8,000 + water line 3,000 + labor and testing 6,000 = $455,000 5. (TCO 1, TCO 2,TCO 3) Alamos Co. exchanged land and $18,000 cash for equipment. The  book value and the fair value of the land were $82,000 and $90,000, respectively. Alamos would  record equipment at which of the following amounts?  (Points: 5)  $ 82,000   $108,000  $ 90,000  $ 8,000 
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FV of land $90,000 + $18,000 = $108,000 6. (TCO 1, TCO 2,TCO 3) Asset retirement obligations do not (Points: 5)  Increase the balance in the related asset account.  Require  measurement at fair value in the balance sheet. Represent liabilities associated with disposition of an operational asset.
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This note was uploaded on 06/03/2011 for the course ACCO 412 taught by Professor Mansour during the Spring '11 term at DeVry Chicago.

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Intermediate Accounting Midterm_monimani - 1.

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