Fixed Assets MCQs

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Merry Co. purchased a machine costing $125,000 for its manufacturing operations and paid shipping costs of $20,000. Merry spent an additional $10,00...






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Cole Co. began constructing a building for its own use in January year 4. During year 4, Cole incurred interest of $50,000 on specific construction ...






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Clay Company started construction of a new office building on January 1, year 4, and moved into the finished building on July 1, year 5. Of the buil...






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On July 1, year 4, Balt Co. exchanged a truck for twenty-five shares of Ace Corp.s common stock. On that date, the trucks carrying amount was $2,5...






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A nonmonetary exchange is recognized at fair value of the assets exchanged unless






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In a nonmonetary exchange, which of the following situations will require the asset to be recognized at the recorded value of the asset relinquished...






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For purposes of nonmonetary exchanges, the configuration of cash flows includes which of the following?






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When determining the commercial substance of the exchange, which of the following items is not considered?






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On March 31, year 4, Winn Company traded in an old machine having a carrying amount of $16,800, and paid a cash difference of $6,000 for a new machi...






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In an exchange of assets that is deemed to lack commercial substance, Transit Co. received equipment with a fair value equal to the carrying amount ...






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May Co. and Sty Co. exchanged nonmonetary assets. The exchange did not result in the expected cash flows of the assets being significantly different...






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Vik Auto and King Clothier exchanged goods, held for resale, with equal fair values. Each will use the others goods to promote their own products. ...






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An entity disposes of a nonmonetary asset in a nonreciprocal transfer. A gain or loss should be recognized on the disposition of the asset when the ...






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On July 1, year 4, one of Rudd Co.s delivery vans was destroyed in an accident. On that date, the vans carrying value was $2,500. On July 15, year...






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During year 4, King Company made the following expenditures relating to its plant building: Continuing and frequent repairs $40,000 Repainted the p...






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On June 18, year 4, Dell Printing Co. incurred the following costs for one of its printing presses: Purchase of collating and stapling attachment $8...






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A building suffered uninsured fire damage. The damaged portion of the building was refurbished with higher quality materials. The cost and related a...






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Derby Co. incurred costs to modify its building and to rearrange its production line. As a result, an overall reduction in production costs is expec...






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Rago Company takes a full years depreciation expense in the year of an assets acquisition, and no depreciation expense in the year of disposition....






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On January 2, year 1, Union Co. purchased a machine for $264,000 and depreciated it by the straight-line method using an estimated useful life of ei...






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On January 1, year 1, Crater, Inc. purchased equipment having an estimated salvage value equal to 20% of its original cost at the end of a ten-year ...






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In which of the following situations is the units-of-production method of depreciation most appropriate?






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A company using the composite depreciation method for its fleet of trucks, cars, and campers retired one of its trucks and received cash from a salv...






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During year 4, the management of West Inc. decided to dispose of some of its older equipment and machinery. By year-end, December 31, year 4, these ...






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At December 31, year 4, Matson Inc. was holding long-lived assets that it intended to sell. The assets do not constitute a separate component of the...






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Taft Inc. recognized a loss in year 3 related to long-lived assets that it intended to sell. These assets were not sold during year 4, and the compa...






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Cranston Inc. reported an impairment loss of $150,000 on its income statement for the year ended December 31, year 3. This loss was related to long-...






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Assets intended to be held and used for productive purposes may suffer from impairment in each of the following circumstances except






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With regard to impaired assets, the FASB standards provide for Recognition of loss upon impairment Restoration of previously recognized impairment ...






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Scarbrough Company had purchased equipment for $280,000 on January 1, year 1. The equipment had an eight-year useful life and a salvage value of $40...






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Linx Corporation acquired equipment on January 1, year 3, for $100,000. The equipment had a ten-year useful life and no salvage value. On December 3...






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Conner Corporation has equipment with a carrying value of $160,000 on December 31, year 4, after recording depreciation expense for year 4. The foll...






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Dahle Corporation has equipment with a carrying value of $450,000 on December 31, year 4. The following information was available on December 31, ye...






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Under the reporting requirements for impaired assets, impairment losses for assets to be held and used shall be reported






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During December year 4, Bubba Inc. determined that there had been a significant decrease in the market value of its equipment used in its manufactur...






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Marjorie, Inc. acquired a machine for $320,000 on August 31, year 1. The machine has a five-year life, a $50,000 salvage value, and was depreciated ...






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Which of the following statements is(are) correct about the carrying amount of a long-lived asset after an impairment loss has been recognized? Assu...






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According to ASC Topic 360, if a long-lived asset is determined to be impaired, how is the loss calculated?






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In accordance with ASC Topic 360, long-lived assets are required to be reviewed for impairment






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During December year 4, Toni Corp. determined that there had been a significant decrease in the market value of its equipment used in its roofing bu...






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Miller Company acquired a machine for $420,000 on June 30, year 2. The machine has a seven-year life, no salvage value, and was depreciated using th...






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In January year 4, Vorst Co. purchased a mineral mine for $2,640,000 with removable ore estimated at 1,200,000 tons. After it has extracted all the ...






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Brunson Corp., a major US winery, begins construction of a new facility in Italy. Following are some of the costs incurred in conjunction with the s...






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On January 1, year 4, Kew Corp. incurred organization costs of $24,000. What portion of the organization costs will Kew defer to years subsequent to...






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Which of the following statements is(are) correct regarding the treatment of start-up activities related to the opening of a new facility? I. Costs...






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Cody Corp. incurred the following costs during year 4: Design of tools, jigs, molds, and dies involving new technology $125,000 Modification of the...






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In year 4, Ball Labs incurred the following costs: Direct costs of doing contract research and development work for the government to be reimbursed...






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West, Inc. made the following expenditures relating to Product Y: Legal costs to file a patent on Product Y-$10,000. Production of the finished pro...






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Brill Co. made the following expenditures during year 4: Costs to develop computer software for internal use in Brills general management informati...






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On January 1, year 4, Jambon purchased equipment for use in developing a new product. Jambon uses the straight-line depreciation method. The equipme...






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On December 31, year 3, Bit Co. had capitalized costs for a new computer software product with an economic life of five years. Sales for year 4 were...






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Which of the following statements is incorrect regarding internal-use software?






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Which of the following statements is(are) correct regarding the proper accounting treatment for internal-use software costs? I. Preliminary costs sh...






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For companies that prepare financial statements in accordance with IFRS, plant, property, and equipment should be valued using which models?






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Which is true about the revaluation model for valuing plant, property, and equipment?






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When the revaluation model is used for reporting plant, property, and equipment, the gain or loss should be included in






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Linden Corporation has investment property that is held to earn rental income. Linden prepares its financial statements in accordance with IFRS. Lin...






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Under IFRS, when an entity chooses the revaluation model as its accounting policy for measuring property, plant, and equipment, which of the followi...






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On January 1, year 1, an entity acquires for $100,000 a new piece of machinery with an estimated useful life of 10 years. The machine has a drum tha...






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Taylor Company uses IFRS for financial reporting purposes. Which of the following is true about accounting for the development costs of the company?...






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Which of the following is true about biological assets under IFRS?






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Roland Corp. signed an agreement with Linx, which requires that if Linx does not meet certain contractual obligations, Linx must forfeit land worth ...






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The cost of self-constructed fixed assets should:






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Gains on the cash sales of fixed assets: