Homework Answers
Answer
- Correct Answer = Option #4: ‘considered a part of the total cost of the acquired company’.
- Any costs that gets incurred to have the purchase contract prepared for net asset acquisition is also a part of the total cost incurred in acquiring the company.
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QUESTION 5 ОООО Costs a company incurs to have the purchase contract prepared for a net...
W QUESTION 4 With a business combination, direct acquisition costs are A. capitalized and amortized over...
W QUESTION 4 With a business combination, direct acquisition costs are A. capitalized and amortized over a discretionary period. B. charged to retained earnings when incurred. C. expensed in the period incurred. D. considered a part of the total cost of the acquired company.
Interest costs can be capitalized on interest incurred during the period of construction on loans for...
Interest costs can be capitalized on interest incurred during the period of construction on loans for self-constructed assets. interest incurred on notes payable used to purchase inventory for resale. interest incurred on installment loans secured by assets currently used in operations. none of these choices; interest charges must always be expensed. Companies record depreciation on equipment to bring the asset's book value to its fair market value. allocate its cost to expense over its useful life. recognize gains in its...
Distinguish between inventoriable costs and period costs. O A. Inventoriable costs include direct manufacturing materials and...
Distinguish between inventoriable costs and period costs. O A. Inventoriable costs include direct manufacturing materials and direct manufacturing labor costs that are capitalized into inventory and remain on the balance sheet until sold. Period costs include indirect manufacturing (or manufacturing overhead) costs and are expensed as incurred through the cost of goods sold account. B. Inventoriable costs include material costs and are capitalized as assets to the company until the items are sold. Period costs include labor and overhead costs...
When issuing bonds or notes, Papaya Company incurs costs, such as legal and accounting fees, printing...
When issuing bonds or notes, Papaya Company incurs costs, such as legal and accounting fees, printing costs, and registration and underwriting fees. Papaya records these costs by combining them with any discount (or subtracting them from any premium) on the debt. Which of the following is an accurate statement regarding the company's policy? Multiple Choice This approach has the appeal of reflecting the effect that debt issue costs have on the effective interest rate because deducting debt issue costs lowers...
When issuing bonds or notes, Papaya Company incurs costs, such as legal and accounting fees, printing...
When issuing bonds or notes, Papaya Company incurs costs, such as legal and accounting fees, printing costs, and registration and underwriting fees. Papaya records these costs by combining them with any discount (or subtracting them from any premium) on the debt. Which of the following is an accurate statement regarding the company’s policy? Multiple Choice The policy is inappropriate because these costs should be expensed in the period the debt is issued. The policy is inappropriate because these costs should...
5 through 8 current assets of the acquired firm. 5. What is the appropriate accounting treatment...
5 through 8
current assets of the acquired firm. 5. What is the appropriate accounting treatment for the value assigned to in process research and devel- opment acquired in a business combination? a. Expense upon acquisition. b. Capitalize as an asset. C Expense if there is no alternative use for the assets used in the research and development and technological feasibility has yet to be reached. d. Expense until future economic benefits become certain and then capitalize as an asset...
Exercise 2‐5 Asset Purchase, Contingent Consideration as a Liability LO 7 Pritano Company acquired all the...
Exercise 2‐5 Asset Purchase, Contingent Consideration as a Liability LO 7 Pritano Company acquired all the net assets of Succo Company on December 31, 2018, for $2,160,000 cash. The balance sheet of Succo Company immediately prior to the acquisition showed: Book value Fair value Current assets $ 960,000 $ 960,000 Plant and equipment 1,080,000 1,440,000 Total $2,040,000 $2,400,000 Liabilities $ 180,000 $ 216,000 Common stock 480,000 Other contributed capital 600,000 Retained earnings 780,000 Total $2,040,000 As part of the negotiations,...
During 2021, Blossom Company purchased the net assets of Crane Corporation for $2226400. On the date...
During 2021, Blossom Company purchased the net assets of Crane Corporation for $2226400. On the date of the transaction, Crane had $607200 of liabilities. The fair value of Crane's assets when acquired were as follows: Current assets $1092960 Noncurrent assets 2550240 $3643200 How should the $809600 difference between the fair value of the net assets acquired ($3036000) and the cost ($2226400) be accounted for by Blossom? The current assets should be recorded at $1092960 and the noncurrent assets should be...
Question 3 Not yet answered If a real estate company expends $100,000 to survey or study...
Question 3 Not yet answered If a real estate company expends $100,000 to survey or study a parcel of land to acquire for development and sale to third parties and it is determined that the property will not be acquired, what happens to the $100,000 spent? Points out of 2.00 P Flag question Select one: O a. The $100,000 is charged to expense when there is enough profit to absorb it. b. The $100,000 is charged to expense as soon...
se Moua 7. The term "comprehensive income" as defined by the FASB a, must be reported...
se Moua 7. The term "comprehensive income" as defined by the FASB a, must be reported on the face of the income statement includes all changes in equity during a period except those resulting from nvestments by and distributions to owners. is the net change in owners' equity for the period. d. is synonymous with the term "net income." 8. Costs that can be reasonably associated with specific revenues but NOT with specific products should be charged to expense in...
W QUESTION 4 With a business combination, direct acquisition costs are A. capitalized and amortized over a discretionary period. B. charged to retained earnings when incurred. C. expensed in the period incurred. D. considered a part of the total cost of the acquired company.
Distinguish between inventoriable costs and period costs. O A. Inventoriable costs include direct manufacturing materials and direct manufacturing labor costs that are capitalized into inventory and remain on the balance sheet until sold. Period costs include indirect manufacturing (or manufacturing overhead) costs and are expensed as incurred through the cost of goods sold account. B. Inventoriable costs include material costs and are capitalized as assets to the company until the items are sold. Period costs include labor and overhead costs...
When issuing bonds or notes, Papaya Company incurs costs, such as legal and accounting fees, printing costs, and registration and underwriting fees. Papaya records these costs by combining them with any discount (or subtracting them from any premium) on the debt. Which of the following is an accurate statement regarding the company's policy? Multiple Choice This approach has the appeal of reflecting the effect that debt issue costs have on the effective interest rate because deducting debt issue costs lowers...
5 through 8
current assets of the acquired firm. 5. What is the appropriate accounting treatment for the value assigned to in process research and devel- opment acquired in a business combination? a. Expense upon acquisition. b. Capitalize as an asset. C Expense if there is no alternative use for the assets used in the research and development and technological feasibility has yet to be reached. d. Expense until future economic benefits become certain and then capitalize as an asset...
During 2021, Blossom Company purchased the net assets of Crane Corporation for $2226400. On the date of the transaction, Crane had $607200 of liabilities. The fair value of Crane's assets when acquired were as follows: Current assets $1092960 Noncurrent assets 2550240 $3643200 How should the $809600 difference between the fair value of the net assets acquired ($3036000) and the cost ($2226400) be accounted for by Blossom? The current assets should be recorded at $1092960 and the noncurrent assets should be...
Question 3 Not yet answered If a real estate company expends $100,000 to survey or study a parcel of land to acquire for development and sale to third parties and it is determined that the property will not be acquired, what happens to the $100,000 spent? Points out of 2.00 P Flag question Select one: O a. The $100,000 is charged to expense when there is enough profit to absorb it. b. The $100,000 is charged to expense as soon...
se Moua 7. The term "comprehensive income" as defined by the FASB a, must be reported on the face of the income statement includes all changes in equity during a period except those resulting from nvestments by and distributions to owners. is the net change in owners' equity for the period. d. is synonymous with the term "net income." 8. Costs that can be reasonably associated with specific revenues but NOT with specific products should be charged to expense in...
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