Question : 41. When a firm constructs its own buildings or equipment, A. it : 1230692

Accounting

41. When a firm constructs its own buildings or equipment,
A. it recognizes the labor, material, and overhead costs incurred as an asset.
B. U.S. GAAP and IFRS require firms to include, or capitalize, interest costs during construction in the cost of a self-constructed asset.
C. it recognizes the labor, material, and overhead costs incurred as a period expense.
D. U.S. GAAP and IFRS require firms to expense interest costs incurred during construction of a self-constructed asset.
E. choices a and b

42. The capitalization of interest in the acquisition cost of assets during construction
A. reduces otherwise reportable interest expense
B. increases net income during periods of construction
C. results in higher depreciation charges, reducing net income.
D. delays expense recognition from the times of borrowing to the times of using the asset.
E. all of the above

43. Assume the following long-term debt structure for Smith Stores:

Construction Loan at 5% on Building Under Construction . . . . . . . ..$2,000,000
Other Borrowings at 6% Average Rate . . . . . . . . . . . . . . . . . . . . . . . . .7,200,000
Total Long-Term Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $9,200,000

The account Building Under Construction has an average balance during the year of $6,000,000. Smith Stores bases the amount of interest capitalized on the new construction-related borrowing, $2,000,000, and enough of the other borrowing to bring the total to $6,000,000.

How much does Smith Stores capitalize interest on the new construction?
A. $240,000
B. $300,000
C. $320,000
D. $340,000
E. $360,000

44. Which of the following is not true regarding long-lived assets with a finite life?
A. The firm consumes the asset’s services over time in generating revenues,
B. The balance sheet carrying value decreases over time as the firm recognizes the cost of the asset as an expense.
C. A portion of the acquisition cost is recognized as an expense each period.
D. Management must estimate the asset’s finite life.
E. Remains on the balance sheet at net realizable value (unless an asset impairment occurs).

45. Which of the following is true regarding long-lived assets with a finite life?
A. The firm consumes the asset’s services over time in generating revenues,
B. The balance sheet carrying value decreases over time as the firm recognizes the cost of the asset as an expense.
C. A portion of the acquisition cost is recognized as an expense each period.
D. Management must estimate the asset’s finite life.
E. all of the above

46. The cost of long-lived assets with an indefinite life
A. is not recognized as an expense each period.
B. remains on the balance sheet at acquisition cost (unless an asset impairment occurs).
C. recognized as an expense each period.
D. balance sheet carrying value decreases over time as the firm recognizes the cost of the asset as an expense.
E. choices a and b

47. Long-lived assets with an indefinite life include
A. trade names
B. trademarks
C. certain renewable licenses
D. goodwill arising from a business combination
E. all of the above

48. Depreciation is the accounting term used to refer to
A. the periodic write-off of the acquisition cost of a tangible long-lived asset with a finite service life
B. the periodic write-off of the current fair market value of a tangible long-lived asset with a finite service life
C. the periodic write-off of the acquisition cost of an intangible long-lived asset with a finite service life
D. the periodic write-off of the current fair market value of a intangible long-lived asset with a finite service life
E. the periodic write-off of intangible assets.

49. Acme Drug Company purchases a patent from its creator. Which of the following is/are true?
A. A patent has a legal life of up to 40 years.
B. Management’s expectations of technological change may lead to a higher economic life than the legal life.
C. Acme should amortize the acquisition cost of the patent over its expected useful life, equal to the shorter of the economic life and the legal life.
D. Acme should amortize the acquisition cost of the patent over its legal life.
E. Acme should amortize the acquisition cost of the patent over its economic life.

50. Which of the following is/are true about goodwill?
A. Goodwill reflects the value of knowledgeable employees.
B. Goodwill reflects the value of a reputation for quality products.
C. Under both U.S. GAAP and IFRS, goodwill has an indefinite life, and firms do not amortize the amount recognized as goodwill.
D. Firms must test goodwill annually for a loss in value.
E. all of the above

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July 1, 2023

135.Use the following data to determine the cost of goods manufactured.

Beginning finished goods inventory$10,800

Direct labor30,600

Beginning work in process inventory7,200

General and administrative expenses13,500

Direct materials used40,500

Ending work in process inventory9,000

Indirect labor6,300

Ending finished goods inventory9,500

Indirect materials13,500

Depreciation—factory equipment7,500

A.$102,000.

B.$110,100.

C.$96,600.

D.$113,700.

E.$100,200.

136.Use the following data to compute total factory overhead costs for the month.

Sales commissions10,800

Direct labor39,600

Indirect materials15,200

Factory manager salaries7,200

Factory supplies9,000

Indirect labor6,300

Depreciation—office equipment5,000

Direct materials40,500

Corporate office salaries42,500

Depreciation—factory equipment7,500

A.$141,100.

B.$125,300.

C.$45,200.

D.$84,800.

E.$58,300.

137.Use the following data to compute total manufacturing costs for the month.

Sales commissions10,800

Direct labor39,600

Indirect materials15,200

Factory manager salaries7,200

Factory supplies9,000

Indirect labor6,300

Depreciation—office equipment5,000

Direct materials40,500

Corporate office salaries42,500

Depreciation—factory equipment7,500

A.$141,100.

B.$125,300.

C.$45,200.

D.$84,800.

E.$58,300.

138.Use the following information to compute the cost of goods manufactured:

Beginning raw materials$5,500

Ending raw materials4,000

Direct labor12,250

Raw material purchases7,400

Depreciation on factory equipment6,500

Factory repairs and maintenance3,300

Beginning finished goods inventory10,200

Ending finished goods inventory8,900

Beginning work in process inventory5,700

Ending work in process inventory6,300

A.$36,650.

B.$30,950.

C.$30,650.

D.$30,350.

E.$31,650.

139.The following information pertains to the Packer Corporation. Calculate the cost of goods sold for the period:

Beginning Raw Materials$30,000

Ending Raw Materials$70,000

Beginning Work in Process Inventory$40,000

Ending Work in Process Inventory$46,000

Beginning Finished Goods Inventory$72,000

Ending Finished Goods Inventory$68,000

Cost of Goods Manufactured for the period$246,000

A.$250,000.

B.$290,000.

C.$242,000.

D.$258,000.

E.$246,000.

140.The following information pertains to the Frameworks Corporation for May. Calculate the cost of goods sold for the period:

Beginning Finished Goods Inventory$19,500

Ending Finished Goods Inventory$18,000

Cost of Goods Manufactured$126,800

A.$164,300.

B.$126,800.

C.$125,300.

D.$146,300.

E.$128,300.

141.Using the information below, calculate the cost of goods manufactured for the period.

Beginning Raw Materials Inventory$25,000

Ending Raw Materials Inventory$30,000

Beginning Work in Process Inventory$55,000

Ending Work in Process Inventory$64,000

Beginning Finished Goods Inventory$80,000

Ending Finished Goods Inventory$67,000

Cost of Goods Sold for the period$540,000

Sales revenues for the period$1,254,000

Operating expenses for the period$232,000

A.$553,000.

B.$536,000.

C.$549,000.

D.$527,000.

E.$525,000.

142.Using the information below, calculate gross profit for the period.

Beginning Raw Materials Inventory$25,000

Ending Direct Materials Inventory$30,000

Beginning Work in Process Inventory$55,000

Ending Work in Process Inventory$64,000

Beginning Finished Goods Inventory$80,000

Ending Finished Goods Inventory$67,000

Cost of Goods Sold for the period$540,000

Sales revenues for the period$1,254,000

Operating expenses for the period$232,000

A.$714,000.

B.$482,000.

C.$1,022,000.

D.$187,000.

E.$727,000.

143.Using the information below, calculate cost of goods sold for the period.

Sales revenues for the period$1,304,000

Operating expenses for the period$239,000

Finished Goods Inventory, January 136,000

Finished Goods Inventory, December 3141,000

Cost of goods manufactured for the period$540,000

A.$774,000.

B.$769,000.

C.$530,000.

D.$535,000.

E.$448,000.

144.Using the information below, calculate gross profit for the period.

Sales revenues for the period$1,304,000

Operating expenses for the period$239,000

Finished Goods Inventory, January 136,000

Finished Goods Inventory, December 3141,000

Cost of goods manufactured for the period$540,000

A.$774,000.

B.$769,000.

C.$530,000.

D.$535,000.

E.$448,000.

July 1, 2023

135.Use the following data to determine the cost of goods manufactured.

Beginning finished goods inventory$10,800

Direct labor30,600

Beginning work in process inventory7,200

General and administrative expenses13,500

Direct materials used40,500

Ending work in process inventory9,000

Indirect labor6,300

Ending finished goods inventory9,500

Indirect materials13,500

Depreciation—factory equipment7,500

A.$102,000.

B.$110,100.

C.$96,600.

D.$113,700.

E.$100,200.

136.Use the following data to compute total factory overhead costs for the month.

Sales commissions10,800

Direct labor39,600

Indirect materials15,200

Factory manager salaries7,200

Factory supplies9,000

Indirect labor6,300

Depreciation—office equipment5,000

Direct materials40,500

Corporate office salaries42,500

Depreciation—factory equipment7,500

A.$141,100.

B.$125,300.

C.$45,200.

D.$84,800.

E.$58,300.

137.Use the following data to compute total manufacturing costs for the month.

Sales commissions10,800

Direct labor39,600

Indirect materials15,200

Factory manager salaries7,200

Factory supplies9,000

Indirect labor6,300

Depreciation—office equipment5,000

Direct materials40,500

Corporate office salaries42,500

Depreciation—factory equipment7,500

A.$141,100.

B.$125,300.

C.$45,200.

D.$84,800.

E.$58,300.

138.Use the following information to compute the cost of goods manufactured:

Beginning raw materials$5,500

Ending raw materials4,000

Direct labor12,250

Raw material purchases7,400

Depreciation on factory equipment6,500

Factory repairs and maintenance3,300

Beginning finished goods inventory10,200

Ending finished goods inventory8,900

Beginning work in process inventory5,700

Ending work in process inventory6,300

A.$36,650.

B.$30,950.

C.$30,650.

D.$30,350.

E.$31,650.

139.The following information pertains to the Packer Corporation. Calculate the cost of goods sold for the period:

Beginning Raw Materials$30,000

Ending Raw Materials$70,000

Beginning Work in Process Inventory$40,000

Ending Work in Process Inventory$46,000

Beginning Finished Goods Inventory$72,000

Ending Finished Goods Inventory$68,000

Cost of Goods Manufactured for the period$246,000

A.$250,000.

B.$290,000.

C.$242,000.

D.$258,000.

E.$246,000.

140.The following information pertains to the Frameworks Corporation for May. Calculate the cost of goods sold for the period:

Beginning Finished Goods Inventory$19,500

Ending Finished Goods Inventory$18,000

Cost of Goods Manufactured$126,800

A.$164,300.

B.$126,800.

C.$125,300.

D.$146,300.

E.$128,300.

141.Using the information below, calculate the cost of goods manufactured for the period.

Beginning Raw Materials Inventory$25,000

Ending Raw Materials Inventory$30,000

Beginning Work in Process Inventory$55,000

Ending Work in Process Inventory$64,000

Beginning Finished Goods Inventory$80,000

Ending Finished Goods Inventory$67,000

Cost of Goods Sold for the period$540,000

Sales revenues for the period$1,254,000

Operating expenses for the period$232,000

A.$553,000.

B.$536,000.

C.$549,000.

D.$527,000.

E.$525,000.

142.Using the information below, calculate gross profit for the period.

Beginning Raw Materials Inventory$25,000

Ending Direct Materials Inventory$30,000

Beginning Work in Process Inventory$55,000

Ending Work in Process Inventory$64,000

Beginning Finished Goods Inventory$80,000

Ending Finished Goods Inventory$67,000

Cost of Goods Sold for the period$540,000

Sales revenues for the period$1,254,000

Operating expenses for the period$232,000

A.$714,000.

B.$482,000.

C.$1,022,000.

D.$187,000.

E.$727,000.

143.Using the information below, calculate cost of goods sold for the period.

Sales revenues for the period$1,304,000

Operating expenses for the period$239,000

Finished Goods Inventory, January 136,000

Finished Goods Inventory, December 3141,000

Cost of goods manufactured for the period$540,000

A.$774,000.

B.$769,000.

C.$530,000.

D.$535,000.

E.$448,000.

144.Using the information below, calculate gross profit for the period.

Sales revenues for the period$1,304,000

Operating expenses for the period$239,000

Finished Goods Inventory, January 136,000

Finished Goods Inventory, December 3141,000

Cost of goods manufactured for the period$540,000

A.$774,000.

B.$769,000.

C.$530,000.

D.$535,000.

E.$448,000.

July 1, 2023

135.Use the following data to determine the cost of goods manufactured.

Beginning finished goods inventory$10,800

Direct labor30,600

Beginning work in process inventory7,200

General and administrative expenses13,500

Direct materials used40,500

Ending work in process inventory9,000

Indirect labor6,300

Ending finished goods inventory9,500

Indirect materials13,500

Depreciation—factory equipment7,500

A.$102,000.

B.$110,100.

C.$96,600.

D.$113,700.

E.$100,200.

136.Use the following data to compute total factory overhead costs for the month.

Sales commissions10,800

Direct labor39,600

Indirect materials15,200

Factory manager salaries7,200

Factory supplies9,000

Indirect labor6,300

Depreciation—office equipment5,000

Direct materials40,500

Corporate office salaries42,500

Depreciation—factory equipment7,500

A.$141,100.

B.$125,300.

C.$45,200.

D.$84,800.

E.$58,300.

137.Use the following data to compute total manufacturing costs for the month.

Sales commissions10,800

Direct labor39,600

Indirect materials15,200

Factory manager salaries7,200

Factory supplies9,000

Indirect labor6,300

Depreciation—office equipment5,000

Direct materials40,500

Corporate office salaries42,500

Depreciation—factory equipment7,500

A.$141,100.

B.$125,300.

C.$45,200.

D.$84,800.

E.$58,300.

138.Use the following information to compute the cost of goods manufactured:

Beginning raw materials$5,500

Ending raw materials4,000

Direct labor12,250

Raw material purchases7,400

Depreciation on factory equipment6,500

Factory repairs and maintenance3,300

Beginning finished goods inventory10,200

Ending finished goods inventory8,900

Beginning work in process inventory5,700

Ending work in process inventory6,300

A.$36,650.

B.$30,950.

C.$30,650.

D.$30,350.

E.$31,650.

139.The following information pertains to the Packer Corporation. Calculate the cost of goods sold for the period:

Beginning Raw Materials$30,000

Ending Raw Materials$70,000

Beginning Work in Process Inventory$40,000

Ending Work in Process Inventory$46,000

Beginning Finished Goods Inventory$72,000

Ending Finished Goods Inventory$68,000

Cost of Goods Manufactured for the period$246,000

A.$250,000.

B.$290,000.

C.$242,000.

D.$258,000.

E.$246,000.

140.The following information pertains to the Frameworks Corporation for May. Calculate the cost of goods sold for the period:

Beginning Finished Goods Inventory$19,500

Ending Finished Goods Inventory$18,000

Cost of Goods Manufactured$126,800

A.$164,300.

B.$126,800.

C.$125,300.

D.$146,300.

E.$128,300.

141.Using the information below, calculate the cost of goods manufactured for the period.

Beginning Raw Materials Inventory$25,000

Ending Raw Materials Inventory$30,000

Beginning Work in Process Inventory$55,000

Ending Work in Process Inventory$64,000

Beginning Finished Goods Inventory$80,000

Ending Finished Goods Inventory$67,000

Cost of Goods Sold for the period$540,000

Sales revenues for the period$1,254,000

Operating expenses for the period$232,000

A.$553,000.

B.$536,000.

C.$549,000.

D.$527,000.

E.$525,000.

142.Using the information below, calculate gross profit for the period.

Beginning Raw Materials Inventory$25,000

Ending Direct Materials Inventory$30,000

Beginning Work in Process Inventory$55,000

Ending Work in Process Inventory$64,000

Beginning Finished Goods Inventory$80,000

Ending Finished Goods Inventory$67,000

Cost of Goods Sold for the period$540,000

Sales revenues for the period$1,254,000

Operating expenses for the period$232,000

A.$714,000.

B.$482,000.

C.$1,022,000.

D.$187,000.

E.$727,000.

143.Using the information below, calculate cost of goods sold for the period.

Sales revenues for the period$1,304,000

Operating expenses for the period$239,000

Finished Goods Inventory, January 136,000

Finished Goods Inventory, December 3141,000

Cost of goods manufactured for the period$540,000

A.$774,000.

B.$769,000.

C.$530,000.

D.$535,000.

E.$448,000.

144.Using the information below, calculate gross profit for the period.

Sales revenues for the period$1,304,000

Operating expenses for the period$239,000

Finished Goods Inventory, January 136,000

Finished Goods Inventory, December 3141,000

Cost of goods manufactured for the period$540,000

A.$774,000.

B.$769,000.

C.$530,000.

D.$535,000.

E.$448,000.

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Question : 41. When a firm constructs its own buildings or equipment, A. it : 1230692

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