Day 17

Question 1

What amount of interest should be capitalized for a construction project not yet completed?

Answer 1

Use the weighted average method

MCQ-08243

Question 2

How is the double declining balance depreciation calculated?

Answer 2

Straight Line depreciation times 200%

MCQ-05651

Question 3

Depletion base price equals

Answer 3

Purchase price
Plus: Development costs
Plus: Estimated Restoration cost
Less: Salvage value

MCQ-00143

Question 4

A machine with a 5 year estimated useful life and 10% salvage value was acquired. Using the sum of years digits method AD would be:

Answer 4

Original cost
Less: Salvage value
Multiplied: by 14/15

MCQ-00385

Question 5

How is composite life of assets calculated?

Answer 5

Total cost
Less: Salvage value
= Depreciable cost
÷ Life
= Annual Depreciation

Composite Life = Depreciable cost / Annual Depreciation

MCQ-05117

Question 6

When using the sum of the years digits what is the carrying amount equal too:

Answer 6

Purchase price less AD

Note: do not subtract salvage value

MCQ-00142

Question 7

When are gains and losses recognized for nonmonetary exchange of assets?

Answer 7

Immediately

MCQ-06938