ch 9 blue packet info

Question 1

Demolition costs are included in which PP&E

Answer 1

Land

Question 2

Land improvement examples (3)

Answer 2

Fences, private driveways, parking lots

Question 3

types of cost included in equipment

Answer 3

anything to get equipment ready for use (freight charges, shipping insurance, assembly)

Question 4

journal entry for interest capitalization (4)

Answer 4

D Asset
D Interest exp (plug)
C Interest Payable
C Cash

Question 5

Gain formula

Answer 5

fair value - book value

Question 6

when do you defer the entire gain?

Answer 6

when it lacks substance and NO cash was received

Question 7

when do you defer the partial gain?

Answer 7

when it lacks substance and cash WAS received

Question 8

what does fair value received equal?

Answer 8

fair value given up

Question 9

commercial substance journal entry (5)

Answer 9

D FV of new PP&E
D Old PP&E AD
C Cash
C OG cost of old PP&E
C Gain

Question 10

recognize the partial gain equation

Answer 10

gain x (cash / cash + FV of new PP&E)

Question 11

what two journal entries for the dealer (4)

Answer 11

D Inventory
D Cash
C Sale revenue

D COGS
C Inventory

Question 12

Are additions expensed or capitalized

Answer 12

additions are always capitalized

Question 13

when do you capitalize Improvement/replacement?

Answer 13

capitalize UNLESS carrying value is NOT known and useful life is extended

Question 14

what do you debit for Improvement/replacement
when carrying value is NOT known and useful life is extended

Answer 14

Debit Accum Dep

Question 15

what do you debit for Improvement/replacement
when carrying value is NOT known and the quantity/quality is increased

Answer 15

Debit Asset

Question 16

what do you debit for Reagangment/reinstallation
when carrying value is NOT known and it is MATERIAL?

Answer 16

Debit asset

Question 17

do you capitalize or expense Reagangment/reinstallation
when carrying value is NOT known and it is NOT material?

Answer 17

Expense as incurred

Question 18

do you capitalize or expense repairs if its an ordinary repair?

Answer 18

Expense as incurred

Question 19

do you capitalize or expense repairs if its an Major repair?

Answer 19

Treat like addition, improvement, or replacement (IE capitalize)

Question 20

if they have similar future cash flows that means?

Answer 20

LACK commercial substance

Question 21

if they have DISsimilar future cash flows that means?

Answer 21

HAS commercial substance