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- Statement 1: When an item of asset is transferred to and from the classification investment property, carried using the cost model, the measurement basis at the date of transfer is the original cost.Statement 2: Any gain or loss from the disposal of the investment property shall be determined as the difference between the net disposal proceeds and the carrying amount of the asset and shall be recognized in profit or lossStatement 3: If owner-occupied property is transferred to investment property that is to be carried at fair value, the difference between the carrying amount of the property and its fair value shall be included in profit or loss.Statement 4: If an entity determines that the fair value of an investment property is not reliably determinable on a continuing basis, the entity shall measure that investment property using the revaluation model. All statements are true. Only two of the statements are true. Only three of the statements are true. All statements are…Statement 1: When an item of asset is transferred to and from the classification investment property, carried using the cost model, the measurement basis at the date of transfer is the original cost.Statement 2: Any gain or loss from the disposal of the investment property shall be determined as the difference between the net disposal proceeds and the carrying amount of the asset and shall be recognized in profit or lossStatement 3: If owner-occupied property is transferred to investment property that is to be carried at fair value, the difference between the carrying amount of the property and its fair value shall be included in profit or loss.Statement 4: If an entity determines that the fair value of an investment property is not reliably determinable on a continuing basis, the entity shall measure that investment property using the revaluation model. A. Only two of the statements are true. B. All statements are true. C. Only one of the statements is true. D. Only three…Depreciation of a plant asset is the process of ________. A. asset valuation for statement of financial position purposes B. allocation of the assets cost to the periods of use C. fund accumulation for the replacement of the asset D. asset valuation based on current replacement cost data
- 19 .All amounts paid to acquire a PPE and to get it ready for its intended use are referred to as: A. set up costs. B. expenditures. C)maintenance expense. D)the cost of an asset. 20. Costs that would be included with the purchase of a PPE are: A)the sum of all of the costs incurred to bring the asset to its intended use. B)only costs that exceed a certain amount. C)only the purchase price. D)none of the above. 21. Which of the following should be included in the cost of land? A) Construction cost of a parking lot B)Landscaping C) Real estate brokerage commission D) LightingWhich of the following are includable to the cost of property and equipment? Transportation costs on machinery purchased under terms FOB shipping point Interest on loans borrowed to purchase an equipment Installation costs and cost of trial runs of a machinery Repairs on broken glass windows of a purchased buildings prior to occupancyThe cost incurred to extend an asset's useful life is recorded as: O a. maintenance expenditures. O b. accrued expenditures. O c. routine expenditures. d. capital expenditures.
- Trinkle Company made several purchases of long-term assets during the year. The details of each purchase are presented here. New Office Equipment 1. List price: $42,600; terms: 2/10, n/30; paid within the discount period. 2. Transportation-in: $880. 3. Installation: $400. 4. Cost to repair damage during unloading: $630. 5. Routine maintenance cost after eight months: $150. Basket Purchase of Copier, Computer, and Scanner for $52,500 with Fair Market Values 1. Copier, $23,421. 2. Computer, $12,027. 3. Scanner, $27,852. Land for New Warehouse with an Old Building Torn Down 1. Purchase price, $83,800. 2. Demolition of building, $4,760. 3. Lumber sold from old building, $1,780. 4. Grading in preparation for new building, $7,900. 5. Construction of new building, $279,000.Costs incurred internally to create intangibles are required to be a. expensed as incurred b. capitalized c. expensed only if they have a limited life O d. capitalized if they have an indefinite lifeIt is the initial cost of acquiring an asset, plus sales tax, transportation and normal costs of making asset serviceable. a. Adjusted standard cost O b. Cost basis O c. Standard cost O d. Adjusted cost basis
- Preparing an asset for sale after its useful life is a: a. Maintenance support cost b. Production and Construction cost c. Disposal cost d. Research and development costThe cost of an item of property, plant and equipment includes all of the following: I. Purchase Price II. Directly attributable costs such as freight and taxes paid. III. Costs of dismantling and removing the item at the end of its useful life. IV. Costs of restoring the site on which the item is located at the end of its useful life. options: A) I and II only; B) I, II, III and IV C) I, II, and III only D) I and III only;1. When an item of asset is transferred to and from the classification investment property, carried using the cost model, the measurement basis at the date of transfer is the a. original cost. b. fair value. c. carrying amount. d. recoverable amount.2. What could be a valid reason for transfers from investment property to property, plant and equipment? a. When there is a change in use b. based on the accountant's discretion c. When the entity adopts the fair value model d. when there is change in asset's life3. An entity has an investment property that is held for rental income. The entity uses the fair value model for reporting the investment property. Which of the following statement is true? a. changes in fair value are reported in profit or loss in the current period b. changes in fair value are reported as an extraordinary gain c. changes in fair value are reported in other comprehensive income for the period d. changes in fair value are…