AFM291 Chapter Notes - Chapter 10: Current Asset, Intangible Asset, Impaired Asset
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10. A corporation issued debt to purchase 10 acres of land fordevelopment purposes. Expenditures related to this purchase are asfollows: Description Amount Purchase price $1,000,000 Real estatetaxes in arrears 15,000 Debt issuance costs 2,000 Attorney fee --title search on land 5,000 The company should record itsacquisition of the land in its financial statements at a value ofa. $1,000,000 b. $1,015,000 c. $1,020,000 2.According to IFRS,which accounting policy may an entity apply to measure investmentproperty in periods subsequent to initial recognition? a. Costmodel or revaluation model. b. Cost model or fair value model. c.Fair value model only. d. Fair value model or revaluationmodel.
11.
Beck Co.âs inventory is as follows:
Beginning inventory | 10 trees at | $ 50 | |
March 4 | purchased | 6 trees at | 55 |
March 12 | sold | 8 trees at | 100 |
March 20 | purchased | 9 trees at | 60 |
March 27 | sold | 7 trees at | 105 |
March 30 | purchased | 4 trees at | 65 |
What was Beckâs cost of goods soldusing the last-in, first-out (LIFO) perpetual method?
$910
$850
$808
$775
12.
Fact pattern: During January, Metro Co., whichmaintains a perpetual inventory system, recorded the followinginformation pertaining to its inventory:
Units | Unit Cost | Total Cost | Units on Hand | |
Balance on 1/1 | 1,000 | $1 | $1,000 | 1,000 |
Purchased on 1/7 | 600 | 3 | 1,800 | 1,600 |
Sold on 1/20 | 900 | 700 | ||
Purchased on 1/25 | 400 | 5 | 2,000 | 1,100 |
Under the moving-average method, whatamount should Metro report as inventory at January 31?
$2,640
$3,225
$3,300
$3,900
13.
According to IFRS, which accounting policy may an entity applyto measure investment property in periods subsequent to initialrecognition?
Cost model or revaluation model.
Cost model or fair value model.
Fair value model only.
Fair value model or revaluation model
Anderson acquires 10 percent of the outstanding voting shares ofBarringer on January 1, 2013, for $102,520 and categorizes theinvestment as an available-for-sale security. |
Year | NetIncome | Cash Dividends |
2013 | $196,000 | $79,000 |
2014 | 243,200 | 116,000 |
2015 | 322,200 | 116,000 |
Anderson sells its entire investment in Barringer stock onJanuary 1, 2016 for $472,005. | ||
In addition, the fair value of the Barringer shares isindeterminate.
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