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ACCT 305 WEEK 1 QUIZ LATEST
1. Question : (TCO 1) The capitalized cost of equipment excludes:
2. Sales tax.
2. Question : (TCO 1) Simpson and Homer Corporation acquired an office building on three acres of land for a lump-sum price of $2,400,000. The building was completely furnished. According to independent appraisals, the fair values were $1,300,000, $780,000, and $520,000 for the building, land, and furniture and fixtures, respectively. The initial values of the building, land, and furniture and fixtures would be:
1. Option a
2. (building 1,200,000/ Land 720,000 / Fixtures 480,000)
3. Option c
4. Option d
3. Question : (TCO 3) In a nonmonetary exchange of equipment, if the exchange has commercial substance, a gain is recognized if:
1. The fair value of the equipment received exceeds the book value of the equipment received.
2. The book value of the equipment received exceeds the fair value of the equipment given up.
3. The fair value of the equipment surrendered exceeds the book value of the equipment given up.
4. None of the above is correct.
4. Question : (TCO 1) Interest is eligible to be capitalized as part of an asset’s cost, rather than being expensed immediately, when: