FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Determine the initial cost of property, plant, and equipment and intangible assets acquired in exchange for other nonmonetary assets.
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- Explain the appropriate accounting treatment required when a change is made in the service life or residual value of property, plant, and equipment and intangible assets.arrow_forwardWhich of the following costs is not typically capitalized as part of an asset’s cost? A) initial testing costs B) Purchase price of a service contract for routine maintenance costs C) Costs of insurance during the construction period D) Transportation costs while the asset was in transit E) Installation costsarrow_forwardCompare the financial reporting of investment property with that of property, plant, andequipmentarrow_forward
- Identify the following as intangible assets (IA), natural resources (NR), or some other asset (O). Oil wellarrow_forwardExercises E9.1 (LO 1), AP Writing The following expenditures relating to plant assets were made by Glenn Company during the first 2 months of 2022. Determine cost of plant acquisitions. 1. Paid $7,000 of accrued taxes at the time the plant site was acquired. 2. Paid $200 insurance to cover a possible accident loss on new factory machinery while the machinery was in transit. 3. Paid $850 sales taxes on a new delivery truck. 4. Paid $21,000 for parking lots and driveways on the new plant site. 5. Paid $250 to have the company name and slogan painted on the new delivery truck. 6. Paid $8,000 for installation of new factory machinery. 7. Paid $900 for a 2-year accident insurance policy on the new delivery truck. 8. Paid $75 motor vehicle license fee on the new truck.arrow_forwardDetermine the initial cost of property, plant, and equipment and intangible assets acquired in exchange for equity securities or through donation.arrow_forward
- Before testing property, plant, and equipment (PPE) and finite-life intangible (FLI) assets, ________. Group of answer choices the firm will assess both PPE and FLI assets as individual assets or in asset groups the firm will assess PPE as individual assets and FLI assets in asset groups the firm will assess both PPE and FLI assets in asset groups the firm will assess PPE in asset groups and FLI assets as individual assetsarrow_forwardPlant Asset Cost Listed below are certain costs (or discounts) incurred in the purchase or construction of new plant assets. (1) Indicate whether the costs should be expensed or capitalized (meaning they are included in the cost of the plant assets on the balance sheet). (2) For costs that should be included in plant assets, indicate in which category of plant assets (Equipment, Building, or Land) the related costs should be recorded on the balance sheet. Expensed or Capitalized Asset Category 1. Charges incurred to train employees to use new equipment 2. Invoice cost to purchase new equipment 3. Deduction for an early payment discount taken on the purchase of new equipment 4. Real estate commissions incurred on land purchased for a new plant 5. Property taxes on land incurred after it was purchased 6. Costs of tune-up for the truck used to deliver new equipment 7. Costs to lay the foundation for a new building 8. Insurance on a new building during the construction phasearrow_forwardProperty plant and equipment are considered what type of asset?arrow_forward
- Which of the following costs incurred internally to create an intangible asset is generallyexpensed? a. Research and development costs.b. Filing costs.c. Legal costs.d. All of the above.arrow_forwardThe term "Fixed Assets" means the same thing as: Multiple Choice Intangible Assets. Current Assets. Natural Resources. Merchandise Inventory. Plant Assets.arrow_forwardWhy are the cost of plant/long term assets recovered through depreciation vs. expensed out during the period purchased?arrow_forward
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