ACCT 305 ACCT305 Chapter 1 Quiz Answers

ACCT 305 ACCT305 Chapter 1 Quiz Answers

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DeVry ACCT 305 ACCT/305 ACCT305 Week 1 Quiz

    1. (TCO 1) Property, plant, and equipment and intangible assets are (Points : 4)
  • (TCO 1) On July 1, 2011, our company purchased a $400,000 tract of land that is intended to be the site of a new office complex. Larkin incurred additional costs and realized salvage proceeds during 2011 as follows.
  • Demolition of existing building onsite
  •  $        75,000
  • Legal and other fees to close escrow
  •            12,000
  • Proceeds from sale of demolition scrap
  •            10,000

  • Which would be the balance in the land account as of December 31, 2011? (Points : 4)
  1. (TCO 3) In a nonmonetary exchange of equipment, if the exchange has commercial substance, a gain is recognized if (Points : 4)
  2. (TCO 1) Interest may be capitalized (Points : 4)
  3. 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 that the exchange has commercial substance, our company would record land-new at and record a gain (loss) of which of these?

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