Please explain

Intermediate accounting 1. Property plant and equipment

11. Assets that qualify for interest cost capitalization include

a. assets under construction for a company's own use.

b. assets that are ready for their intended use in the earnings of the company. c. assets that are not currently being used because of excess capacity. d. All of these assets qualify for interest cost capitalization.

12. Interest revenue earned on specific borrowings for qualifying assets a. reduces the cost of the qualifying asset.

b. reduces interest expense reported on the income statement.

c. increases equity in the period earned.

d. None of these answer choices are correct.

13. Which of the following statements is true regarding capitalization of interest? a. Interest cost capitalized in connection with the purchase of land to be used as a building site should be debited to the land account and not to the building account.

b. The amount of interest cost capitalized during the period should not exceed the actual interest cost incurred.

c. When excess borrowed funds not immediately needed for construction are temporarily invested, any interest earned should be recorded as interest revenue.

d. The minimum amount of interest to be capitalized is determined by multiplying a weighted average interest rate by the amount of average accumulated expenditures on qualifying assets during the period. 14. If the cost of the asset is recorded net of the government grant, a. equity will likely be overstated.

b. liabilities will likely be overstated.

c. assets will likely be understated.

d. revenues will likely be understated.

15. Which of the following non-monetary exchange transactions has commercial substance? a. Exchange of assets with no difference in future cash flows.

b. Exchange of products by companies in the same line of business with no difference in future cash flows. c. Exchange of assets with a difference in future cash flows.

d. Exchange of an equivalent interest in similar productive assets that causes the companies involved to remain in essentially the same economic position.

16. When cash is involved in an exchange having commercial substance. a. gains or losses are recognized in their entirety.

b. a gain or loss is computed by comparing the fair value of the asset received with the fair value of the asset given up.

c. only gains should be recognized.

d. only losses should be recognized.

17. The cost of a non-monetary asset acquired in exchange for another non-monetary asset and the exchange has commercial substance is usually recorded at

a. the fair value of the asset given up, and a gain or loss is recognized. b. the fair value of the asset given up, and a gain but not a loss may be recognized. c. the fair value of the asset received if it is equally reliable as the fair value of the asset given up. d. either the fair value of the asset given up or the asset received, whichever one results in the largest gain (smallest loss) to the company.

18. Plant assets purchased on long-term credit contracts should be accounted for at a. the total value of the future payments.

b. the future amount of the future payments.

c. the present value of the future payments.

d. none of these answer choices are correct.

19. When a plant asset is acquired by issuance of ordinary shares, the cost of the plant asset is properly measured by the

a. par value of the shares.

b. stated value of the shares.

c. book value of the shares.

d. fair value of the shares.

20. When a corporation issues preference shares for land, the land should be recorded at the a. total par value of the shares issued.

b. total book value of the shares issued.

c. total liquidating value of the shares issued.

d. fair value of the land.