ACCT 3332 Final Exam 2022 with complete solution

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P. Chang & Co. exchanged land and $9,000 cash for equipment. The book value and the fair value of the land were $106,000 and $90,000, respectively. Chang would record equipment at and record a gai ... n/(loss) of: Equipment Gain (loss) $99,000 $(16,000) $90,000 $(25,000) $108,000 $16,000 $106,000 $(9,000) -Answer- $99,000 $(16,000) Kross Co. exchanged land and $18,000 cash for equipment. The book value and the fair value of the land were $212,000 and $180,000, respectively. Assuming that the exchange has commercial substance, Kross would record equipment at and record a gain (loss) of Equipment Gain (loss) $198,000 $(32,000) $180,000 $(50,000) $216,000 $32,000 $212,000 $(18,000) -Answer- $198,000 $(32,000) Software development costs are capitalized if they are incurred Prior to point at which technological feasibility has been established After technological feasibility has been established but prior to the product availability date After commercial production has begun None of these is correct. -Answer- After technological feasibility has been established but prior to the product availability date Vijay Inc. purchased a 3-acre tract of land for a building site for $320,000. On the land was a building with an appraised value of $120,000. The company demolished the old building at a cost of $12,000, but was able to sell scrap from the building for $1,500. The cost of title insurance was $900 and attorney fees for reviewing the contract was $500. Property taxes paid were $3,000, of which $250 covered the period subsequent to the purchase date. The capitalized cost of the land is: $336,400. $336,150. $334,650. $201,150. -Answer- $334,650. On July 1, 2009, Larkin Co. purchased a $400,000 tract of land that is intended to be the site of a new office complex. Larkin incurred additional costs and realized salvage proceeds during 2009 as follows: Demolition of existing building on site $75,000 Legal and other fees to close escrow $12,000 Proceeds from asle of demolition scrap $10,000 What would be the balance in the land account as of December 31, 2009? $400,000. $475,000. $477,000. $487,000. -Answer- $477,000. Asset retirement obligations: Increase the balance in the related asset account. Are measured at fair value in the balance sheet. Are liabilities associated with the restoration of an operational asset. All of these are correct. -Answer- All of these are correct. Assets acquired under multi-year deferred payment contracts are: Valued at the present value of the payments required by the contract Valued at their fair value on the date of the final payment Valued at the sum of the payments required by the contract None of these -Answer- Valued at the present value of the payments required by the contract The exclusive right to benefit from a creative work, such as film, is a: Patent. Copyright. Trademark. Franchise. -Answer- Copyright. In a nonmonetary exchange of equipment, if the exchange has commercial substance, a gain is recognized if: The fair value of the equipment received exceeds the book value of the equipment received. The book value of the equipment received exceeds the fair value of the equipment surrendered. The fair value of the equipment surrendered exceeds the book value of the equipment surrendered. None of these is correct. -Answer- The fair value of the equipment surrendered exceeds the book value of the equipment surrendered. Below are data relative to an exchange of similar assets by Grand Forks Corp. Assume the exchange has commercial substance. Old Equipment Cash Book Value Fair Value Paid Case A $50,000 $60,000 $15,000 Case B $40,000 $35,000 $8,000 In Case B, Grand Forks would record a gain/(loss) of: $ 5,000 $ 3,000 $(5,000) $(3,000) -Answer- $(5,000) Research and development expense for a given period includes: The full cost of a newly acquired operational asset that has an alternative future use. Depreciation on a research and development facility. Research and development conducted on a contract basis for another entity. Patent filing and legal costs. -Answer- Depreciation on a research and development facility. If a company incurs disposition obligations as a result of acquiring an asset: The company recognizes the obligation at fair value when the asset is acquired. The company recognizes the obligation at fair value when the asset is disposed. The company records the difference between the fair value of the asset and the obligation when the asset is acquired. None of these. -Answer- The company recognizes the obligation at fair value when the asset is acquired. [Show More]

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