ACCT 304 Midterm Exam - Complete Questions, Answers and Instructor Explanation

ACCT 304 Midterm Exam Question 1. Question : Property, plant, and equipment and intangible assets are Question 2. Question : (TCO 3) Our company exchanged land and cash of $5,000 for similar land. The book value and the fair value of the land were $90,000 and $100,000, respectively. Assuming the exchange lacks commercial substance, which amount is correct? Question 3. Question : (TCO 2) The exclusive right to benefit from a creative work, such as a film, is a Question 4. Question : (TCO 4) The overriding principle for all depreciation methods is that the method must be Question 5. Question : (TCO 4) On September 30, 2013, our company purchased a machine for $100,000. The estimated service life is 10 years, with a $10,000 residual value. Our company records partial-year depreciation based on the number of months in service. Depreciation for 2013, using double-declining balance, would be Question 6. Question : (TCO 4) A change from the straight-line method to the sum-of-years'-digits method of depreciation is handled as Question 7. Question : (TCO 5) Fair value and appreciation of the investee are not as relevant for investments in which of the following categories? Question 8. Question : (TCO 5) Consolidated financial statements are prepared when one company has Question 9. Question : (TCO 4) Interest is not capitalized for Question 10. Question : (TCO 2) Goodwill is Question 11. Question : (TCO 4) Depreciation, depletion, and amortization Question 12. Question : (TCO 5) Which of the following types of securities only includes debt securities? Question 13. Question : (TCO 1) The capitalized cost of equipment excludes Question 14. Question : (TCO 3) When selling property, plant, and equipment for cash Question 15. Question : (TCO 2) Research and development (R & D) costs Question 16. Question : (TCO 4) The depreciable base for an asset is Question 17. Question : (TCO 5) Trading securities are most commonly found with Question 18. Question : (TCO 5) All investments in debt and equity securities that don't fit the definitions of the other reporting categories are classified as Question 19. Question : (TCO 5) If Company 1 exercises significant influence over Company 2 and owns 38% of its common stock, then Company 1 Question 20. Question : (TCO 2) Please explain how software development costs are treated. How is this different from other types of R & D? Question 21. Question : (TCO 4) How is a change in depreciation method accounted for? Question 22. Question : (TCO 1) What are the costs that are included in the purchase of equipment? What costs would be excluded?