On January 3, 2020, Munoz Co. purchased machinery.

The machinery has an estimated useful life of eight years

a.
€420,000.

b.
€390,000.

c.
€360,000.

d.
€468,000.
On July 1, 2010, Spear Co. issued 1,000 of its 10%, $1,000 bonds at 99 plus accrued interest. The bonds are dated
April 1, 2010 and mature on April 1, 2020. Interest is payable semiannually on April 1 and October 1. What
amount did Spear receive from the bond issuance?

Question 2Select one:

a.
$965,000.

b.
$1,015,000.

c.
$1,000,400.

d.
$990,000.
Clear my choice

In January 2022, Fehr Mining Corporation purchased a mineral mine for £4,200,000 with removable ore estimated
by geological surveys at 2,500,000 tons. The property has an estimated value of £400,000 after the ore has been
extracted. Fehr incurred £1,150,000 of development costs preparing the property for the extraction of ore. During
2022, 340,000 tons were removed and 300,000 tons were sold. For the year ended December 31, 2022, Fehr
should include what amount of depletion in its cost of goods sold?

Question 3Select one:

a.
£673,200

b.
£456,000

c.
£594,000

d.
£516,800
Clear my choice
When the effective-interest method is used to amortize bond premium or discount, the periodic amortization will
Question 4Select one:

a.
decrease if the bonds were issued at a premium.

b.
increase if the bonds were issued at a premium.

c.
increase if the bonds were issued at a discount.

d.
increase if the bonds were issued at either a discount or a premium.
True statement for describes the operating cycle?
Question 5Select one:

a.
The period of time elapsing between the creation of a non current liability and the payment of that non current liability.

b.
The period of time elapsing between the acquisition of goods and services and the final cash realization resulting from
sales.

c.
The period of time elapsing between the recording of a non current asset and the settlement of a current liability.

d.
Any random period of time less than 12 months in length.
A machine cost €120,000, has annual depreciation of €20,000, and has accumulated depreciation of €90,000 on
December 31, 2021. On April 1, 2022, when the machine has a fair value of €27,500, it is exchanged for a machine
with a fair value of €135,000 and the proper amount of cash is paid. The exchange has commercial substance. The
gain to be recorded on the exchange is
Question 6Select one:

a.
€2,500.

b.
€3,500.

c.
€20,000

d.
€5,000.
Forburd Company purchased land for a manufacturing facility for €1,100,000. The company paid €70,000 to tear
down a building on the land. Salvage was sold for €10,500. Legal fees of €6,500 were paid for title investigation
and making the purchase. Architect's fees were €40,500. Title insurance cost €4,500, and liability insurance during
construction cost €13,500. Excavation cost €12,000. The contractor was paid €1,357,000. A one -time assessment
made by the city for sidewalks was €7,500. Forburd installed lighting and signage at a cost of €11,000. The cost of
the building that should be recorded by Forburd is
Question 7Select one:
a.
€1,357,500.

b.
€1,423,000.

c.
€1,505,500.

d.
€1,432,000.
On September 19, 2021, McCoy Co. purchased machinery for £190,000. Residual value was estimated to be
£10,000. The machinery will be depreciated over eight years using the sum-of-the-years'-digits method. If
depreciation is computed on the basis of the nearest full month, McCoy should record depreciation expense for
2022 on this machinery of
Question 8Select one:

a.
£38,845.

b.
£38,750.

c.
£40,903.

d.
£35,000.
True statement for the presentation of current liabilities in the statement of financial, except...
Question 9Select one:

a.
The non-current liabilities section follows the current liabilities section.

b.
A company can exclude a short-term obligation from current liabilities if, at the financial statement date, it has the
right to defer settlement of the liability for at least 12 months after the reporting date.

c.
Current liabilities may be listed in order of maturity, in descending order of magnitude or in order of liquidity
preference.

d.
Current liabilities should not be offset against the assets that will be used to liquidate them.
Which of the following is not a condition that must be satisfied before capitalization of borrowing costs can begin
on a qualifying asset?
Question 10Select one:

a.
Interest cost is being incurred.

b.
The interest rate is equal to or greater than the company's cost of capital.
c.
Activities that are necessary to get the asset ready for its intended use are in progress.

d.
Expenditures for the assets have been made.
A loss on impairment of an intangible asset is the difference between the asset’s
Question 11Select one:

a.
carrying amount and the expected future net cash flows.

b.
book value and its fair value.

c.
recoverable amount and the expected future net cash flows.

d.
carrying amount and its recoverable amount.
On May 25, Kiehl Company purchased inventory from Clark Company for HK$30,000, terms 2/10, n/30. The
invoice was paid on Juny 5. What amount will Clark report on its statement of financial position at May 30?
Question 12Select one:

a.
HK$600.

b.
HK$29,400.

c.
HK$30,000.

d.
HK$29,300.
Lynne Corporation acquired a patent on May 1, 2024. Lynne paid cash of €40,000 to the seller. Legal fees of
€1,000 were paid related to the acquisition. What amount should be debited to the patent account?
Question 13Select one:

a.
€41,000

b.
€39,000

c.
€40,000

d.
€1,000
Eaton Inc. purchased land as a factory site for €600,000. Wilson paid €60,000 to tear down two buildings on the
land. Salvage was sold for €5,400. Legal fees of €3,480 were paid for title investigation and making the purchase.
Architect's fees were €31,200. Title insurance cost €2,400, and liability insurance during construction cost €2,600.
Excavation cost €10,440. The contractor was paid €2,200,000. An assessment made by the city for pavement was
€6,400. Interest costs during construction were €170,000.The cost of the land that should be recorded by Wilson
Co. is
Question 14Select one:

a.
€669,880.

b.
€660,480.

c.
€676,280.

d.
€666,880
All of the following are true regarding revaluation except
Question 15Select one:

a.
Revaluation is an “all or nothing” proposition, that is, if a company chooses revaluation it must revalue all its assets.

b.
Annual revaluation of assets is not required unless the assets are experiencing rapid price changes.

c.
The unrealized gain on revaluation is often referred to as revaluation surplus.

d.
A revaluation is recorded by debiting the accumulated depreciation account for the asset.
Which of the following companies is most likely to issue liquidating dividends? The company
Question 16Select one:

a.
owns only one major asset from which it intends to extract mineral resources.

b.
encounters long delays between the time it incurs costs and the time it obtains benefits from the extracted resources.

c.
uses the full-cost concept and has capitalized exploratory and evaluation (E&E) costs.

d.
uses the successful-efforts concept and has capitalized pre-exploratory expenditures.
he interest rate written in the terms of the bond indenture is known as the
Question 17Select one:

a.
stated rate.

b.
coupon rate.

c.
nominal rate.

d.
coupon rate, nominal, or stated rate.
Myers Company acquired machinery on January 1, 2017 which it depreciated under the straight-line method with
an estimated life of fifteen years and no residual value. On January 1, 2022, Myers estimated that the remaining
life of this machinery was six years with no residual value. How should this change be accounted for by Myers?
Question 18Select one:

a.
By continuing to depreciate the machinery over the original fifteen-year life

b.
As a prior period adjustment

c.
By setting future annual depreciation equal to one-sixth of the book value on January 1, 2022

d.
As the cumulative effect of a change in accounting principle in 2022
Plant assets purchased on long-term credit contracts should be accounted for at
Question 19Select one:

a.
none of these answer choices are correct.

b.
the total value of the future payments.

c.
the present value of the future payments.

d.
the future amount of the future payments.
Gornend Corporation sold 10,500 Machine for £1,100 each during 2023. The Machine are under warranty for one
year following the sale. Maintenance on the Machine during the warranty period averages £90 each. Actual
warranty costs incurred during 2022 for units sold that year were £296,000. The statement of financial position at
year end will report a related liability of:
Question 20Select one:

a.
£649,000.

b.
£694,000.

c.
£296,900.

d.
£946,000.
Unearned revenues arise from the following transaction, except:
Question 22Select one:

a.
The sale by a restaurant of meal tickets that may be exchanged or used to pay for future meals.

b.
The sale of season tickets to sports or entertainment events.

c.
The Sale and a transfer of rights to goods or services.

d.
The sale by a transportation company of tickets or tokens that may be exchanged or used to pay for future fares.
When a company purchases land with the intention of developing it for a particular use, interest costs associated
with those expenditures qualify for capitalization of borrowing costs.
Question 23Select one:

a.
True

b.
False
Under current accounting practice, intangible assets are classified as
Question 24Select one:

a.

amortizable or unamortizable.

b.

legally restricted or goodwill-type.

c.

limited-life or indefinite-life.

d.

specifically identifiable or goodwill-type.

Mini Corp. acquires a patent from Maxi Co. in exchange for 2,500 shares of Mini Corp.’s €5 par value ordinary
shares and €85,000 cash. When the patent was initially issued to Maxi Co., Mini Corp.’s shares were selling at
€7.50 per share. When Mini Corp. acquired the patent, its shares were selling for €9 a share. Mini Corp. should
record the patent at what amount?
Question 25Select one:

a.
€ 85,000

b.
€ 107,500

c.
€ 97,500

d.
€ 103,750
A company issues $20,000,000, 7.8%, 20-year bonds to yield 8% on January 1, 2010. Interest is paid on June 30
and December 31. The proceeds from the bonds are $19,604,145. Using effective-interest amortization, how much
interest expense will be recognized in 2010?
Question 26Select one:

a.
$780,000.

b.
$1,568,332.

c.
$1,560,000.

d.
$1,568,498.
If bonds are issued between interest dates, the entry on the books of the issuing corporation could include a
Question 27Select one:

a.
debit to Interest Payable.

b.
credit to Interest Expense.

c.
credit to Unearned Interest.

d.
credit to Interest Receivable.
Elena Corporation purchased a patent for a new product from the inventor for £180,000 on January 1, 2020. It had
a useful life of 10 years. Elena made minor modifications to the patent and spent additional registration and legal
fees of £48,000 on January 2, 2022, extending the life of the old patent to a useful life of 12 years. What amount
should be reported for patent amortization expense on 12/31/21?
Question 28Select one:

a.
£14,400.

b.
£36,000.

c.
£18,000.

d.
£16,000.
Which of the following intangible assets should be shown as a separate item on the statement of financial
position?
Question 29Select one:

a.
Franchise

b.

Goodwill

c.

Patent

d.

Trademark

On March 30, Flurry Company signed a HK$256,850, one-year zero-interest-bearing note at Victoria Bank and
received HK$197,500. The March 30 journal entry to record issuance of the note would include:
Question 30Select one:

a.
a debit to Cash for HK$256,850.

b.
a debit to Notes Receivable for HK$256,850.

c.
a debit to Interest Expense for HK$59,350.

d.
a credit to Notes Payable for HK$197,500.