Which of the following assets should be a. land.
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A: The land is a fixed asset that does not depreciate just like other fixed assets. Any improvement…
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- LO1 The purpose of depreciation is to (a) spread the cost of an asset over its useful life. (b) show the current market value of an asset. (c) set up a reserve fund to purchase a new asset. (d) expense the asset in the year it was purchased.(33) Amortization expense is recorded for: A. A franchise established with a contract that allows for unlimited extensions. B. Intangible assets with a finite life. C. Intangible assets with an indefinite life. D. GoodwillWhich of the following statements are true about the revaluation model perIAS 16 Property, Plant and Equipment?1) Excess depreciation as a result of a revaluation exercise can betransferred between reserves2) Depreciation must be charged based on the historical cost of theasset3) All assets of the same class must be revalued4) Valuations must be independent and carried out regularly Which is correct ?a) 1, 3 and 4b) All of the abovec) 1 and 3d) 2, 3 and 4
- 11 _______________is the reduction in the value of the fixed assets because of their use, wear and tear, efflux of time; depletion etc. a. None of the given options b. Amortization c. Depreciation d. Depletion Clear my choice1. A change in the amortization rate for an intangible asset should be accounted for a. by retrospective restatement. b. by retrospective application. c. on a prospective basis. d. on a current basis. 2. If a franchise becomes worthless before the end of its useful life, the carrying amount of the franchise account should be charged as a. franchise expense in the current period. b. a prior period adjustment. c. impairment loss. d. amortization expense. 3. Which of the following is a true statement concerning research and development (R&D) costs? a. All R&D costs, without exception, must be charged to expense when incurred. b. R&D costs can only be amortized over a life of 40 years or more. c. Almost any treatment is acceptable for handling R&D costs. d. Financial statements must disclose total R&D costs charged to expense in the period 4. Which of the following is an unidentifiable asset? a. Goodwill b. Private-to-private franchise c. Deferred charges d. Unearned…30. The book value of a plant asset is A) equal to the balance of the related accumulated depreciation account. B) the assessed value of the asset for property tax purposes. C) the asset's acquisition cost less the total related depreciation recorded to date. D) the fair market value of the asset at a balance sheet date.
- 2. The ABC Company is involved in the exploration of mineral rights. Its policy is to recognize exploration assets and measure them initially at cost. During 2021 ABC incurs the following expenditure. Exploratory drilling for minerals on site and related activities, P200,000; Roads and infrastructure to access exploration site P350,000, Expenditures relating to the subsequent development of the resources, P340,000. In accordance with IFRS6 Exploration for and evaluation of mineral resources, at what amount should exploration assets be initially recognized in the financial statements of ABC?True or False _____ PAS 16 defines depreciation as "the decrease in the value of an asset." ______ According to PAS 16, items of PPE are initially measured at cost and subsequently measured using either the cost model or the fair value model. _______ an entity acquires an asset for P120k. The asset is estimated to have a useful life of 10 years and a residual value P20K. tHE STRAIGHT LINE DEPRECIATION RATE BASED ON DEPRECIABE AMOUNT IS 10% _______ An entity acquires an asset for P1M. A P200k residual value is estimated for the asset. Ar the end of the asset's useful life, the accumulated depreciation wil be equal to P1M. _______ A machine acquired on the 20th of Julyv(and ready for its intended use as at this date) would most likely be depreciated starting on the 1st of August. _______ A change in the depreciation method, useful life or residual value of a PPE is accounted for retrospectively.ccounting 1). Intangible drilling costs are costs associated with drilling an oil and gas well to the point of completion. An Integrated Oil and Gas company is allowed to deduct these costs in what manner? a. Cost Depletion b. 100% Expensed c. 70% Expensed and 30% Capitalized & Amortized d. 100% Amortized
- 16.Entity D acquired a property in 2021 which contains mineral deposit. The acquisition cost of the property was P20,000,000. After acquisition, the following costs were incurred: Exploration cost P13,000,000; Development cost related to drilling wells P10,000,000; Development cost related to production equipment P15,000,000. For P2,000,000, the entity is legally required to restore the land to a condition appropriate for resale. It is estimated that the property can be sold for P5,000,000 following mineral extraction. Geological estimates indicate that 5,000,000 tons of mineral may be extracted. The entity extracted 600,000 tons of the mineral in 2021 and sold 450,000 tons. How much is the depletion included in the entity's inventory at Dec 31, 2021?10-A newly acquired plant asset is to be deprecated over its useful life. The rationale for the process is the: A. Going concern assumption B. Materiality assumption C. Monetary unit assumption D. Economic unit assumption12 In a taxable asset acquisition, amounts allocated to Class VI and Class VII assets will likely be amortized by the buyer over how many years: a. 5 years under IRC 167 b. 20 years under IRC 168 c. 15 years under IRC 197 d. 39.5 years under IRC 212
