Reference no: EM132627451

Problem 1: The historical cost of an asset less its residual (scrap) value is called:

Select one:

a. carrying value.
b. depreciable amount.
c. accumulated depreciation.
d. straight-line value.

Problem 2: IAS 16/AASB 116 defines the cost of acquisition for fixed assets as:

Select one:

a. purchase cost plus any incidental costs directly attributable to acquiring the asset and getting it ready for use.
b. invoice cost plus freight inwards, plus other costs of acquiring the asset.
c. carrying value in the previous owner's books.
d. invoice cost.

Problem 3: Blue Horizon has acquired equipment and incurred these expenses in doing so.

Gross invoice price, net of GST, subject to terms of 2/10, n/30) $14,500
Transportation costs to get equipment to factory $1,200
Speeding ticket incurred by company driver while delivering equipment to the factory $120
Cost to repair wall damaged during installation $500
Special permit to allow wide load on freeway $300

The equipment should be recorded in Blue Horizon's records at:

Select one:

a. $15 700.

b. $14 500.

c. $16 500.

d. $16 000.