Answer the following questions and quote examples where applicable.

Question No. 1:

In establishing financial accounting standards, the IASB has a thorough, open, and transparent due process. List the elements that comprise the IASB due process.

Question No. 2:

List and discuss the characteristics of the International Accounting Standards Board (IASB) that reinforce the importance of an open, transparent, and independent process.

Question No. 3:

Why would it be advantageous for U.S. GAAP and IFRS to be the same?

Question No. 4:

What is the difference between principles-based and rules-based accounting rules? Are IFRS more principles-based than U.S. GAAP? Explain.

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Question No. 5:

La Bianco Company purchased land for a manufacturing facility for AED1,100,000. The company paid AED70,000 to tear down a building on the land. Salvage was sold for AED10,500. Legal fees of AED6,500 was paid for the investigation and making the purchase. Architect's fees were AED40,500. The insurance cost AED4,500, and liability insurance during construction cost AED13,500. Excavation cost AED12,000. The contractor was paid AED1,357,000. A one -time assessment made by the city for sidewalks was AED7,500. La Bianca installed lighting and signage at a cost of AED11,000.

1. The cost of the land that should be recorded by La Bianca is

a. AED1,195,000.

b. AED1,178,000.

c. AED1,103,500.

d. AED1,006,500.

2. The cost of the building that should be recorded by La Bianca is

a. AED1,505,500.

b. AED1,432,000.

c. AED1,423,000.

d. AED1,357,500.

3. La Bianca should record land improvements of

a. AED-0-.

b. AED11,000.

c. AED18,500.

d. AED23,000.

Question No. 6:

1. Dubai Enterprise constructed a building at a cost of AED24,000,000. Average accumulated expenditures were AED17,000,000, actual interest was AED2,120,000, and avoidable interest was AED1,600,000. If the salvage value is AED4,600,000, and the useful life is 30 years, depreciation expense for the first full year using the straight-line method is

a. AED700,000.

b. AED717,733.

c. AED800,000.

d. AED870,667.

Question No. 7:

1. On April 13, 2018, Neill Co. purchased machinery for AED120,000. Residual value was estimated to be AED5,000. The machinery will be depreciated over ten years using the double-declining balance method. If depreciation is computed based on the nearest full month, Neill should record depreciation expense for 2019 on this machinery of

a. AED20,800.

b. AED20,400.

c. AED20,550.

d. AED20,933.

Question No. 8:

1. Matile Co. purchased machinery that was installed and ready for use on January 3, 2018, at a total cost of AED69,000. Residual value was estimated at AED9,000. The machinery will be depreciated over five years using the double-declining balance method. For the year 2019, Matile should record depreciation expense on this machinery of

a. AED14,400.

b. AED16,560.

c. AED18,000.

d. AED27,600.

Question No. 9:

1. A plant asset has a cost of 24,000 and a residual value of 6,000. The asset has a three-year life. If depreciation in the third year amounted to 3,000, which depreciation method was used?

a. Straight-line

b. Declining-balance

c. Sum-of-the-years'-digits

d. Cannot tell from information given

Question No. 10:

1. On January 1, 2018, Graham Company purchased a new machine for AED2,100,000. The new machine has an estimated useful life of nine years and the residual value was estimated to be AED75,000. Depreciation was computed on the sum-of-the-years'-digits method. What amount should be shown in Graham's balance sheet at December 31, 2019, net of accumulated depreciation, for this machine?

a. AED1,695,000

b. AED1,335,000

c. AED1,306,666

d. AED1,244,250

Question No. 11:

1. On January 1, 2012, Forbes Company purchased equipment at a cost of AED50,000. The equipment was estimated to have a residual value of AED5,000 and it is being depreciated over eight years under the sum-of-the-years'-digits method. What should be the charge for depreciation of this equipment for the year ended December 31, 2019?

a. AED1,250

b. AED1,389

c. AED2,500

d. AED5,625

Question No. 12:

1. During self-construction of an asset by Samuelson Company, the following were among the costs incurred:

Fixed overhead for the year 1,000,000

Portion of 1,000,000 fixed overhead that would

be allocated to asset if it were normal production 40,000

Variable overhead attributable to self-construction 35,000

What amount of overhead should be included in the cost of the self-constructed asset?

a. -0-

b. 35,000

c. 40,000

d. 75,000