Acc305 Intermediate Accounting Chapter 10 Operational Assets Acquisition and Disposition (10 MCQs)

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Acc305 Intermediate Accounting

Chapter 10 Operational Assets Acquisition and Disposition

1.  On Exercise 10-1, what is the capitalized cost of land? (Points: 5)
       $60000 
       $66000 
       $58000 
       $64000 

2.  On Exercise 10-1, what would be the capitalized cost of the old building reported as a part of the cost of land? (Points: 5)
       $1500 
       $6000 
       $2000 

       $4000 

3.  On Exercise 10-1, what is the capitalized cost of the building? (Points: 5)
       $517000 

       $512000 
       $505000 
       $520000 

4.  From Exercise 10-1, what cost incurred is not part of the initial price of an operational asset? (Points: 5)
       Any cost of bringing the asset to its condition and location for use 
       Transportation cost paid by the seller to transfer the asset to the location it will be used 
       Expenditures for Installation 
       Testing of the equipment to establish working condition 
       Legal fees to establish title 

5. From Exercise 10-1, which statement would be correct concerning property taxes due to the land purchase during the year? (Points: 5)
       Property taxes will always be part of the purchase price from the beginning of the period to date of purchase 
       Property taxes will part of a land acquisition from the date the building is recorded on the seller’s books 
       Property taxes on the land for the period after acquisition are not part of the acquisition cost and are expensed in the period incurred. 
       Property taxes on the land for the period after acquisition are part of the acquisition cost and are capitalized in the period incurred. 

6. On Exercise 10-8 which of the following represents the percentage of total fair value allocated to the land? (Points: 5)
       25% 
       30% 

       45% 
       100% 

7. On Exercise 10-8 which of the following represents the initial cost of building A? (Points: 5)
       $405,000 

       $450,000 
       $225,000 
       $270,000 

8. On Exercise 10-8 which of the following represents the initial dollar value allocation to the land? (Points: 5)
       $300,000 
       $270,000  

       $250,000 
       $225,000 

9. For Exercise 10-18 (Requirement 1) the fair value of new land including cash given is which of the following amounts? (Points: 5)
       $86,000  

       $72,000 
       $30,000 
       $14,000 

10. For Exercise 10-18 (Requirement 3) the book value of the old land is which of the following amounts? (Points: 5)
       $14,000 
       $30,000 
       $42,000 
       $86,000 

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