$1.$ Account for property, plant, and equipment related costs after acquisition

Alliance, Inc. has a large factory operating in western Washington. In $2020,$ extensive mold was discovered in the factory. The mold, located in the air duct system, was caused by several roof leaks that had been there for several years. The cost to remove the mold was $$200,000.$ The cost was material to the company. Which of the following statements is accurate?

Select one:

a$.$ The cost to remove the mold should be capitalized and depreciated over the remaining useful life of the factory building.

b$.$ The cost to remove the mold should be capitalized and the service life of the building should be extended.

c$.$The cost to remove the mold should be capitalized and the service life of the building should be reduced.

d$.$ The cost to remove the mold should be expesed in $2020.$

$2.$ Account for exchange of property, plant, and equipment

A company exchanged a warehouse for another similar warehouse. The fair value of the warehouse received exceeded the net book value of the warehouse given up in the exchange by $$5,000.$ The entry to record the transaction would not include any debits or credits to income statement accounts in which of the following situations?

Select one:

a$.$ The exchange lacked commercial substance and no cash was paid or received.

b$.$ The exchange lacked commercial substance and $$3,000$ in cash was paid.

cThe exchange lacked commercial substance and $$3,000$ in cash was received.

d$.$ A and B

e$.$ B and C

f$.$A and C

g$.$ A$,$ B$,$ and C

$3.$ How would you record equipment donated to the company? The transfer is unconditional and not an exchange of goods & services.

Slect one:

a$.$ The equipment is recorded at fair value, along with Contribution Revenue.

b$.$ The equipment is recorded using the donor's book value.

c$.$ The equipment is recorded at fair value but does not result in revenue to the company.

d$.$ The equipment is recorded at fair value, along with Service Revenue.