What is the proper treatment of freight and interest expense

Assignment Help Managerial Accounting
Reference no: EM132983172

Problem 1: Land improvements

a) Should be included in the cost of land.

b) Are subject to depreciation.

c) Should be charged as an expense in the year purchased.

d) Should be deducted from the cost of land.

Problem 2: Small tools and containers used repeatedly for more than a year are classified on the balance sheet as?

a) Current assets

b) Fixed assets (PPE)

c) Deferred charges

d) Investments

Problem 3: Which of the following is not a capital expenditure?

a) Repairs that maintain an asset in operating condition

b) An addition

c) A betterment

d) A replacement

Problem 4: An entity imported machinery to install in its new factory before year-end. However, due to circumstances beyond its control, the machinery was delayed by a few months but reached the factory premises before year-end. While this was happening, the entity learned from the bank that it was being charged interest on the loan it had taken to fund the cost of the plant. What is the proper treatment of freight and interest expense under PAS 16?

a) Both expenses should be capitalized.

b) Freight charges should be capitalized but interest cannot be capitalized under these circumstances.

c) Interest may be capitalized but the freight should be expensed.

d) Both expenses should be expensed.

Reference no: EM132983172

Questions Cloud

Which of the reporting standards is most relevant : In your selection of an appropriate accounting policy for the recognition and measurement of the machine, which of the reporting standards is most relevant?
Adkar model for change and kurt levin : Critically analyze the factors driving change in a luxury resort. Develop a change management implementation plan with relevant details on addressing the Foreca
Case study-marriott-international-company : 1. Executive Summary: A summary of the entire report in not more than one page of A4 paper. Marriott-international-company.
New perspective on gender-based expectations : Considering the various environmental forces impacting business, which force(s) do
What is the proper treatment of freight and interest expense : What is the proper treatment of freight and interest expense under PAS 16? An entity imported machinery to install in its new factory before year-end.
Should John Ltd consolidate Orange Grove Lid : Should John Ltd consolidate Orange Grove Lid? Be sure to justify your decision with an explanation of why or why not
Diversity and inclusion within an organization : Recommend a solution to address generational differences as it relates to diversity and inclusion within an organization. Please include references.
Which the fair value has been determined : Which the fair value has been determined, and for which incidental costs were incurred in acceptance of the asset, should be recorded at an amount equal to its
At what point should Geox Ltd reorder shoes : The annual cost of physically storing shoes is $8.75 per unit. If it takes two weeks to receive an order, at what point should Geox Ltd reorder shoes

Reviews

Write a Review

Managerial Accounting Questions & Answers

  Manage budgets and financial plans

Explain the budgeting process and its importance to a business, identifying the components of different budgets, forecast estimates for inclusion in the budgets.

  Prepare a retained earnings statement

Prepare a retained earnings statement for the year and Prepare a stockholders' equity section of given case.

  Prepare a master budget for the three-month period

Prepare a master budget for the three-month period.

  Construct the companys direct labor budget

Construct the company's direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced.

  Evaluate the predetermined overhead rate

Evaluate the Predetermined Overhead Rate

  Determine the company''s bid

Determine the company's bid if activity-based costing is used and the bid is based upon full manufacturing cost plus 30 percent.

  Compute the pool rates for the different activities

Complete the schedule to compute the pool rates for the different activities.

  Prepare Company financial statements

Prepare Company financial statements

  Prepare an analysis of terracycles

This individual assignment is based on the TerraCycle Inc.

  Discuss the ethical issues

Discuss the ethical issues

  Political resources in emerging markets

Calculate the GDP in Income Approach  and Expenditure Approach

  Management accounting - ehsan electronics company

A new plant accountant suggested that the company may be able to assign support costs to products more accurately by using an activity based costing system that relies on a separate rate for each manufacturing activity that causes support costs.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd