MBA 601 Exam 2 Questions With Correct
Answers
Which |of |the |following |is |not |a |tangible |asset?
Building
Copyright
Land
Gold |- |CORRECT |ANSWER✔✔-copyright
tangible: |buildings, |land, |or |gold |[things |you |can |touch]
intangible: |paten, |copyright, |trade |name, |trademark, |franchise, |good |will
[things |you |cannot |touch]
Land |is |different |from |other |tangible |assets |in |that |its |utility |is |not |diminished |by |its |use. |This |
statement |is |(true/false) |- |CORRECT |ANSWER✔✔-true
Which |of |the |following |is |an |intangible |asset? |- |CORRECT |ANSWER✔✔--Patent
-Copyright
-Trademark
Capitalizing |the |cash |cost |of |a |piece |of |equipment |is |- |CORRECT |ANSWER✔✔-an |asset |
exchange |event
Corazon |Company |purchased |an |asset |with |a |list |price |of |$14,000. |Corazon |paid |$500 |of |
transportation-in |cost, |$800 |to |train |an |employee |to |operate |the |equipment, |and |$200 |to |
,ensure |the |asset |against |theft |after |it |has |been |set |up |in |the |factory. |The |asset |was |purchased |
under |terms |1/20/n30 |and |Corazon |paid |for |the |asset |within |the |discount |period. |Based |on |
this |information, |Corazon |would |capitalize |the |asset |on |its |books |at:
Note: |"Terms |1/20/n30" |means |a |1% |discount |is |offered |if |the |purchase |is |paid |within |20 |days,
|otherwise |the |purchase |must |be |paid |within |30 |days. |- |CORRECT |ANSWER✔✔-$15,160
Cost |of |Asset: |
List |Price$14,000 |
Plus: |Transportation |in |500 |
Plus: |Training |800 |
Less: |Cash |discount |($14,000 |list |price |× |0.01 |discount) |(140) |
Total |cost |capitalized |$15,160
Note |that |the |$200 |of |insurance |was |not |included |because |it |applied |to |coverage |after |the |
asset |had |been |acquired |and |set |up |for |use.
All |training |costs |associated |with |the |purchase |and |continuing |use |of |an |asset |should |be |
capitalized |in |the |asset |account. |This |statement |is |(true/false) |- |CORRECT |ANSWER✔✔-false
When |the |total |estimated |market |value |of |assets |acquired |in |a |basket |purchase |is |greater |than
|the |cost |of |the |purchase, |the |company |making |the |purchase |must |recognize |a |gain.
|(true/false) |- |CORRECT |ANSWER✔✔-False
Guac |Co. |paid |$350,000 |for |a |purchase |that |included |land, |a |building, |and |equipment. |An |
appraiser |estimated |the |market |value |of |the |land |to |be |$80,000, |the |building |to |be |$300,000, |
and |the |equipment |to |be |$20,000. |
, Based |on |this |information |recording |the |basket |purchase |in |the |accounting |records |would |
cause |- |CORRECT |ANSWER✔✔-no |effect |on |total |assets |or |total |equity.
A |basket |purchase |is |an |asset |exchange |transaction.
Harbor |Co. |made |a |basket |purchase. |Specifically, |the |Company |paid |cash |to |purchase |land, |a |
building |and |equipment. |The |appraised |market |value |of |the |individual |items |was |greater |than |
the |purchase |price. |Which |of |the |following |shows |how |this |purchase |will |affect |a |company's |
financial |statements? |- |CORRECT |ANSWER✔✔-Assets |= |Liab |+ |Equity
NA=NA+NA
Rev. |- |Exp |= |Net |Income
NA−NA=NA
statement |of |Cash |Flows
− |IA
Sable |Co. |paid |$400,000 |for |a |purchase |that |included |land, |a |building, |and |equipment. |An |
appraiser |estimated |the |market |value |of |the |land |to |be |$100,000, |the |building |to |be |$350,000,
|and |the |equipment |to |be |$50,000. |Based |on |this |information |the |cost |that |would |be |allocated
|to |each |of |the |assets |is:
| Land |Building |Equipment
A.$80,000 |$280,000 |$40,000 |
B.$100,000 |$350,000 |$50,000 |
C.$80,000 |$240,000 |$50,000 |
D.$100,000 |$280,000 |$40,000 |- |CORRECT |ANSWER✔✔-Option |A
Answers
Which |of |the |following |is |not |a |tangible |asset?
Building
Copyright
Land
Gold |- |CORRECT |ANSWER✔✔-copyright
tangible: |buildings, |land, |or |gold |[things |you |can |touch]
intangible: |paten, |copyright, |trade |name, |trademark, |franchise, |good |will
[things |you |cannot |touch]
Land |is |different |from |other |tangible |assets |in |that |its |utility |is |not |diminished |by |its |use. |This |
statement |is |(true/false) |- |CORRECT |ANSWER✔✔-true
Which |of |the |following |is |an |intangible |asset? |- |CORRECT |ANSWER✔✔--Patent
-Copyright
-Trademark
Capitalizing |the |cash |cost |of |a |piece |of |equipment |is |- |CORRECT |ANSWER✔✔-an |asset |
exchange |event
Corazon |Company |purchased |an |asset |with |a |list |price |of |$14,000. |Corazon |paid |$500 |of |
transportation-in |cost, |$800 |to |train |an |employee |to |operate |the |equipment, |and |$200 |to |
,ensure |the |asset |against |theft |after |it |has |been |set |up |in |the |factory. |The |asset |was |purchased |
under |terms |1/20/n30 |and |Corazon |paid |for |the |asset |within |the |discount |period. |Based |on |
this |information, |Corazon |would |capitalize |the |asset |on |its |books |at:
Note: |"Terms |1/20/n30" |means |a |1% |discount |is |offered |if |the |purchase |is |paid |within |20 |days,
|otherwise |the |purchase |must |be |paid |within |30 |days. |- |CORRECT |ANSWER✔✔-$15,160
Cost |of |Asset: |
List |Price$14,000 |
Plus: |Transportation |in |500 |
Plus: |Training |800 |
Less: |Cash |discount |($14,000 |list |price |× |0.01 |discount) |(140) |
Total |cost |capitalized |$15,160
Note |that |the |$200 |of |insurance |was |not |included |because |it |applied |to |coverage |after |the |
asset |had |been |acquired |and |set |up |for |use.
All |training |costs |associated |with |the |purchase |and |continuing |use |of |an |asset |should |be |
capitalized |in |the |asset |account. |This |statement |is |(true/false) |- |CORRECT |ANSWER✔✔-false
When |the |total |estimated |market |value |of |assets |acquired |in |a |basket |purchase |is |greater |than
|the |cost |of |the |purchase, |the |company |making |the |purchase |must |recognize |a |gain.
|(true/false) |- |CORRECT |ANSWER✔✔-False
Guac |Co. |paid |$350,000 |for |a |purchase |that |included |land, |a |building, |and |equipment. |An |
appraiser |estimated |the |market |value |of |the |land |to |be |$80,000, |the |building |to |be |$300,000, |
and |the |equipment |to |be |$20,000. |
, Based |on |this |information |recording |the |basket |purchase |in |the |accounting |records |would |
cause |- |CORRECT |ANSWER✔✔-no |effect |on |total |assets |or |total |equity.
A |basket |purchase |is |an |asset |exchange |transaction.
Harbor |Co. |made |a |basket |purchase. |Specifically, |the |Company |paid |cash |to |purchase |land, |a |
building |and |equipment. |The |appraised |market |value |of |the |individual |items |was |greater |than |
the |purchase |price. |Which |of |the |following |shows |how |this |purchase |will |affect |a |company's |
financial |statements? |- |CORRECT |ANSWER✔✔-Assets |= |Liab |+ |Equity
NA=NA+NA
Rev. |- |Exp |= |Net |Income
NA−NA=NA
statement |of |Cash |Flows
− |IA
Sable |Co. |paid |$400,000 |for |a |purchase |that |included |land, |a |building, |and |equipment. |An |
appraiser |estimated |the |market |value |of |the |land |to |be |$100,000, |the |building |to |be |$350,000,
|and |the |equipment |to |be |$50,000. |Based |on |this |information |the |cost |that |would |be |allocated
|to |each |of |the |assets |is:
| Land |Building |Equipment
A.$80,000 |$280,000 |$40,000 |
B.$100,000 |$350,000 |$50,000 |
C.$80,000 |$240,000 |$50,000 |
D.$100,000 |$280,000 |$40,000 |- |CORRECT |ANSWER✔✔-Option |A
