1)On January 1, 2016, Dreamworld Co. began construction of a new warehouse. The building was finished and ready for use on September 30, 2017. Expenditures on the project were as follows:

January 1, 2016	$300,000
September 1, 2016	$450,000
December 31, 2016	$450,000
March 31, 2017	$450,000
September 30, 2017	$300,000

Dreamworld had $5,000,000 in 12% bonds outstanding through both years. Dreamworld's average accumulated expenditures for 2016 was:

$450,000.

$525,000.

$600,000.

$300,000.

2)Alamos Co. exchanged equipment and $18,000 cash for similar equipment. The book value and the fair value of the old equipment were $82,000 and $90,000, respectively. Assuming that the exchange lacks commercial substance, Alamos would record a gain/(loss) of:

$8,000.

($8,000).

$0.

$26,000.

3)The exclusive right to benefit from a creative work, such as a film, is a:

Patent.

Franchise.

Trademark.

Copyright.

4)The fixed-asset turnover ratio provides:

The rate of decline in asset lives.

The amount of sales generated per dollar of fixed assets.

The decline in book value of fixed assets compared to capital expenditures.

The rate of replacement of fixed assets.

5)Average accumulated expenditures:

Is computed as a simple average if all construction expenditures are made at the end of the period.

Is an approximation of the average debt a firm would have outstanding if it financed all construction through debt.

Are irrelevant if the company's total outstanding debt is less than total costs of construction.

All of these answer choices are true statements.