Use the following information for questions 28 and 219 and s a tactory ste for $
ID: 2569350 • Letter: U
Question
Use the following information for questions 28 and 219 and s a tactory ste for $000,000. Seler paid $80,000 to tear down two buildings on the paid for title rivestgation and making the and. Salvage was sold for $5.400. Legal fees of $3.480 were purchase. Architects fees construction cost $2,600. Excavation cost (part of construction) $10,440. The interest costs during construction were $170.000 --e S31200 Tie mrance cost $2.400, and lability nsurance dang contractor was paid 32,200,000 were The oostofthe land tat s ould be recorded by Seder a is a $860,480 c $669,880 d $076,280 -20. -20. The cost ofthe buldrg hat should be recorded by Selef Co. is $2,403,800. b $2,404,840 e $2,413,200 d $2,414,240 30 Solen Co. and Nolse Co. exchanged similar trucks with fair values in excess of carrying amounts. In addition, Solen paid Noise to compensate for the difference in truck values and the transaction lacks commercial substance. As a consequence of the exchange, Solen recognizes a. A gain equal to the difference between the fair value and the market value of the truck given up b. A gain determined by the proportion of cash paid to the total consideration c A loss determined by the proportion of cash paid to the total consideration d. Neither a gain or a loss 31. On January 1, 2003, an intangble asset with a 35-year estimated useful life was acquired. On January 1, 2008, a review was made of the estimated usefual life, and it was determined that the intangible asset had an estimated useful Iife of 45 more years. As a result of the review a. The original cost at January 1, 2003, should be amortized over a 50 year life b. The original cost at January 1, 2003, should be amortized over a 30 year ife C. The unamortized cost at January 1, 2008, should be amortized over a 40 year life d. The unamortized cost at January 1, 2008, should be amortized over a 45 year ife _ 32 Both us. GAAP and FRS exclude which of the folwng tomths cost of mentory? a. Selling costs b. General administrative costs d. All of these are excluded by U.S. GAAP and IFRS 33. Al of the following are key smilates between us. GAAP and IFRS wth respect to accorting for inventories except a. guidelines on ownership of goods are similar b. costs to include in inventories are similar c. LIFO cost flow assumption where appropriate is used by both sets of standards d. fair value valuation of inventories is prohibited by both sets of standardsExplanation / Answer
28a $660,480 Explanation: The cost of the land that should be recorded by Seilor Co. is $660,480. **$600,000 + $60,000 – $5,400 + $3,480 + $2,400 = $660,480 . 29d $2,414,240 Explanation: The cost of the building that should be recorded by Seilor Co. is $2,414,240 **$31,200 + $2,600 + $10,440 + $2,200,000 + $170,000 = $2,414,240 30d Neither a gain nor a loss. Explanation: Gain or loss whatever is rcognised based on the boot given up but no more data given in problem for determining it. 31d The unamortized cost at January 1, 2008, should be amortized over a 45-year life. Explanation: Answer D is correct because if the estimated useful life of an intangible asset is revised, the unamortized cost should be allocated over the remaining periods of the new useful life.