Multiple Choice Questions [20 marks, each carries 2 marks] - Choose the best answer. (1) When a debt security is appropriately carried and reported as FVOCI securities, a gain should be reported in the Statement of Profit or Loss a. Never b. Only when the present value of the security increases c. Only when the fair value of the security increases. d. Only when the security is sold (2) Which of the following items is NOT an indicator that an asset may be impaired? a. Recent price quotes in the used equipment market indicate that the resale value of the equipment has declined dramatically due to the introduction of new technology. b. Recent maintenance reports indicate that machinery used by an entity in its operations has worn out more than originally estimated. c. Cash flows for acquiring the asset or subsequent cash needs for operating or maintaining it, are significantly higher than those originally budgeted. d. Market interest rates or other market rates of return on investments have decreased during the period. (3) The acquisition costs of property, plant, and equipment do not include: a. Maintenance costs during the first 30 days of use. b. The ordinary and necessary costs to bring the asset to its desired condition and location for use. c. The net invoice price. d. Legal fees related to the purchase of the assets. (4) Fryer Co. owns equipment for which it paid $90 million. At the end of 2023 , it had accumulated depreciation on the equipment of $27 million. Due to adverse economic conditions, Fryer's management assessed whether an impairment should be recognized for the equipment. The estimated present value of future cash flows is $60 million, and the equipment's fair value less selling costs at that point is $40 million. Fryer Co. will: a. Record no impairment loss on the equipment. b. Credit $3 million to accumulated depreciation account. c. Credit $3 million to equipment account. d. Credit $3 million to accumulated impairment loss account