Financial reporting

1. In France, financial reporting must conform to :(A) a specific format of tax measurement rules(B) French GAAP(C) standards from the International Accounting Standards BoardP(D) u.s GAAP2. The Lee Co. Purchased a new piece of machinery early in January of the current fiscal year for $35,000. The company spent $1,000 for freight on the equipment and $3,000 to have the machine to be $3,000 and the useful life to be 10 years . Using the straight-line method of depreciation, the expense for the current fiscal year would be:(A) $3,100(B) $3,200(C) $3,400(D) $3,6003. The Daniel Company sold a machine. The machine had accumulated depreciation of $25,000 and a salvage value of $3,000 . If the machine sold for $8,000 and a gain of $2,000 is recognized on the sale, the original cost of the machine was(A) $27,000(B) $31,000(C) $33,000(D) $35,0004. The clean water company sold equipment that originally cost $50,000 for $12,000. The asset had accumulated depreciation of $30,000 at the end of the previous fiscal year. Depreciation expense to the date of the sale for the current fiscal year is $4,000. Which of the following line items related to this sale would appear in the income statement for Clean Water Company in the current fiscal year?(A) Extraordinary gain of $8,000(B) Extraordinary loss of $8,000(C) Ordinary gain of $4,000(D) Ordinary loss of $4,0005. Brunson Corporation acquired a new machine on January 2, Year 1, at a cost of $63,000. The machine had an expected life of 4 years and a salvage value of $3,000. If Brunson uses the double-declining balance method of depreciation, the depreciation expense recorded in a Year 2 is :(A) 11,813(B) 15 000(C) 15,750(D) 31,5006. The Windmill Company acquired a long-lived asset 10 years ago at a cost of $800,000. Three years later the asset sustained an impairment in value. At the time of the impairment , the fair value of the asset was $400,000 and the carrying (book) value was $600,000. Which of the following entries would be made to record the impairment ?200,000200,000200,000200,000200,000200,000200,000200,0007. The Get Rich Drilling Company purchased an oil we’ll lease for $8,000,000 at the beginning of year 7. During the year 7, it drilled 10 wells at a cost of $9,000,000 each. Three of the wells were economically feasible wells and the remaining were dry holes. If Get Rich uses the successful-efforts approach to determine the asset cost, the capitalized cost is:(A) $9,000,000(B) $27,000,000(C) $35,000,000(D) $98,000,0008. The FASB requires that virtually all costs incurred for research and development of an internally generated patent be:(A) amortized for not more than 40 years(B) capitalized(C) expensed(D) ignored9. The Get Rich Drilling Company purchased an oil we’ll lease for $8,000,000 at the beginning of year 7. During year 7, it drilled 10 oil wells at a cost of $,9000,000 each. Three of the wells were economically feasible wells and the remaining wells were dry holes. if Get Rich uses the full-cost approach to determine the asset cost, the capitalized cost is:(A) $8,000,000(B) $27,000,000(C) $68,600,000(D) $98,000,00010.Clermont Company started construction of a new office building on January 1,2000, and moved into the finished building on July 1, 2002. Of the building’s $2,500,000 total cost , $2,000,000 was incurred by 12/31/2000 in even increments throughout the year. Clermont’s weighted average borrowing rate was 12% throughout 2000, and the actual amount of interest incurred by Clermont during 2000 was $135,000. What amount should Clermont report as capitalized interest at 12/31/2000?(A) $120,000(B) $135,000(C) $150,000(D) $240,00011. Tim Enterprises purchased a machine for $130,000. The seller paid $450 freight to deliver the machine. Tim used $2,300 of staff mechanics time to install the machine and employee training cost $3,500 . The state charged a 2% sales tax on the invoice price. The capitalized cost of the machine.(A) $130,000(B) $135,800(C) $136,250(D) $138,40012. The Burrell Company acquired a tract of land for a new restaurant paying $150,000. Burrell removed the old building at a cost of $20,000 and sold scrapped material salvaged from the old building for $5,000. The architect’s fees were $25,000 and the title insurance on the land was $1,000. The construction period interest was $8,000 and the contractor received $300,000 for the building. The land should be recorded by Burrell at a cost of:(A) $150,000(B) $165,000(C) $166,000(D) $175,00013. Refer to the information given in question 12. The new building should be recorded by Burrell at a cost of :(A) $300,000(B) $326,000(C) $333,000(D) $334,000

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