23 S1: Two methods of allocating joint costs to main products are physical measure allocation and market-based allocation. S2: If an intercompany sale of a depreciable asset occurs on the last day of the year and results in a gain to the seller, the asset must be shown on the consolidated balance sheet at its original book value.

23 S1: Two methods of allocating joint costs to main products are physical measure allocation and market-based allocation. S2: If an intercompany sale of a depreciable asset occurs on the last day of the year and results in a gain to the seller, the asset must be shown on the consolidated balance sheet at its original book value.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 4MC: Which of the following statements about capitalizing costs is correct? A. Capitalizing costs refers...

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TRUE or FALSE S1: Two methods of allocating joint costs to main products are physical measure allocation and market-based allocation. S2: If an intercompany sale of a depreciable asset occurs on the last day of the year and results in a gain to the seller, the asset must be shown on the consolidated balance sheet at its original book value.
According to historical cost principle, the assets and liabilities should be reported (tick whichever apply)? a.At their market value b.At their cost of acquisition c.At their replacement value d.All of the above
1. A company is deciding whether to exchange an old asset for a new asset. Within the context of the exchange decision, and ignoring income tax considerations, the undepreciated book value of the old asset would be considered a(an) Sunk cost Irelevant cost No No Yes No No Yes d. Yes Yes 2. Expected future costs that will differ among alternatives a. Opportunity cost. b. Relevant costs. c. Sunk cost. d. Out-of-pocket costs.
15 All financial assets are initially measured at fair value plus transaction costs, except Group of answer choices Fair value through OCI Fair value through profit and loss Amortized cost None of these
When a group of assets is acquired for a lump sum price, the total cost should be allocated to the individual assets based on their relative fair value, appraised value or assessed value. True False
1. Directly attributable costs include:I. Interest Expense when the asset is ready for useII. Value-added taxes, the entity is not VAT-registered a. I onlyb. II onlyc. Both I and IId. Neither I nor II2. Computation of maximum dividend of wasting asset corporations include the following, except: I. Appropriated retained earningsII. Realized portion of accumulated depletiona. I onlyb. II onlyc. I and IId. None from I and II PLEASE ANSWER ITH REFERENCE
1. Directly attributable costs include:I. Interest Expense when the asset is ready for useII. Value-added taxes, the entity is not VAT-registered a. I onlyb. II onlyc. Both I and IId. Neither I nor II2. Computation of maximum dividend of wasting asset corporations include the following, except: I. Appropriated retained earningsII. Realized portion of accumulated depletiona. I onlyb. II onlyc. I and IId. None from I and IIPLEASE ADD REFERENCE FOR ANSWERPS: NOT SATISFIED WITH THE ANSWER OF LAST TUTOR
ces Elsa Products processes Chem-Z Into two products: Chem-A and Chem-B. Chem-Z costs $41,200 per batch. The joint process produces 5,000 units of Chem-A with a market value of $174,200, and 15,000 units of Chem-B with a market value of $39,350. The conversion cost of the joint process is $16,000 per batch. Elsa Products allocates Joint costs using the physical quantities method. The company never holds any Inventory. Required: a. What cost (total, not unit) and profit will be reported for each product using the current method for allocating Joint costs? b. If the costs of the joint process are allocated on the basis of the net realizable value of the products, what cost (total, not unit) and profit will be reported for each product? c. How much will profit at Elsa Products Increase or decrease if the company switches to the net realizable value method for allocating Joint process costs? Complete this question by entering your answers in the tabs below. Required A Required B Required C…
15 Under physical capital maintenance assumption, a profit is earned only if the physical operating capability of the entity at the end of the accounting period is _____________ its physical operating capability at the start of the period, after adjusting for any amounts contributed by or distributed to owners during the period. a. Equal to b. Less than c. None of the given options d. Greater than
Historical cost is based on actual, not merely possible, transactions. It is the acquisition price of the assets. The managers only have to record all the assets and liabilities at their acquisition price. This results in; a. Less manipulations in financial statements b. surviving test of time c. making relevant economic decisions d. None
The depreciation method that can be most easily manipulated is the: Group of answer choices straight-line method weighted-average method double-declining method units-of-activity method Gross profit is calculated as: Group of answer choices Sales revenue –COGS COGA –COGS COGS-Sales revenue Sales revenue –Operating expenses
Which of the following statements about capitalizing costs is correct? A. Capitalizing costs refers to the process of converting assets to expenses. B. Only the purchase price of the asset is capitalized. C. Capitalizing a cost means to record it as an asset. D. Capitalizing costs results in an immediate decrease in net income.