Reference no: EM132494301

Questions -

Q1. Hackleman Company is constructing a building. Construction began in 2018 and the building was completed 12/31/18. Hackleman made payments to the construction company of $1,500,000 on 7/1, $3,300,000 on 9/1, and $3,000,000 on 10/31. The weighted-average accumulated expenditures were:

a. $1,575,000

b. $1,850,000

c. $2,350,000

d. $1,975,000

e. $2,600,000

Q2. Harbor Co. began constructing a building for its own use in January of the current year. During the current year, Harbor incurred interest of $20,000 on specific construction debt, and $60,000 on other borrowings. Interest computed on the weighted-average amount of accumulated expenditures for the building during the current year was $40,000. What amount of interest cost should Harbor capitalize?

a. $40,000

b. $80,000

c. $100,000

d. $20,000

e. $60,000

Q3. In an exchange of nonmonetary assets that lacks commercial substance, cash equal to 10% of the total fair value is received. What is the immediate treatment of any gains or losses?

a. Any gains are fully recognized, but any losses are not recognized.

b. Any losses are fully recognized, but any gains are partially recognized.

c. Both gains and losses are fully recognized.

d. Any losses are fully recognized, but any gains are not recognized.

e. Any gains are partially recognized, but any losses are not recognized.

Q4. Which item is considered in the depreciation of an asset by the Units-of-Output method that is not considered by other methods?

a. Salvage Value

b. Present Value of future cash flows

c. Amortized Cost

d. Amount of goods that the asset produces

e. Cost of any improvements to the asset