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21. When computing the amountof interest cost to be capitalized,the concept of avoidable interest refers to: (a) The total interest cost actually incurred. (b) That
21. When computing the amountof interest cost to be capitalized,the concept of "avoidable interest" refers to: (a) The total interest cost actually incurred. (b) That portion of average accumulated expenditures on which no (c) A cost of capital charge for stockholders' equity. (d) That portion of total interest cost which would not have been incurred interest cost was incurred. if expenditures for asset construction had not been made. 22. For a nonmonetary exchange of plant assets, accounting recognition should not be given to: (a) (b) (c) (d) Part of a gain when the transaction for the assets exchanged lacks commercial substance and cash is paid. A loss when the transaction for the assets exchanged lacks commercial substance Part of a gain when the transaction for the assets exchanged lacks commercial substance and cash is received. A gain when the transaction for the assets exchanged has commercial substance. A company buys a lift truck with a list price of $40,000. The dealer grants a 15% reduction in list price and an additional 2% cash discount on the net price if payment is made in 30 days. Sales taxes amount to S500 and the company paid an extra $400 to have a special horn installed. What should be the recorded cost of the truck? (a) S34,160. (b) $34,220. (c) $33,820. (d) $33,320. 23
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