Property, Plant and Equipment

Question 1

What are the steps for capitalized interest in construction of assets for a company’s use?

Answer 1

Question 2

What are the cost of land?

Answer 2

Question 3

What are the costs capitalized in land and building accounts?

Answer 3

Question 4

When do you test for recoverability for long-lived assets?

Answer 4

Question 5

How to handle asset exchanged for a note?

Answer 5

Question 6

What are the journal entry for asset purchase?

Answer 6

Question 7

What is the treatment of capital expenditures on an existing asset?

Answer 7

Question 8

Double-Declining balance depreciation method

Answer 8

Question 9

What happens when assets are acquired as a lump sum purchase?

Answer 9

Question 10

How is avoidable interest calculated?

Answer 10

(Weighted average accumulated expenditures (AAE) portion applied to construction debt * construction debt * construction debt rate) + Weighted average accumulated expenditures (AAE) portion applied to general debt * general debt rate)

Question 11

How is actual interest incurred?

Answer 11

(Construction debt * construction debt rate) + (General debt x General debt rate)