QUESTION 16 2.5 points Save Answer Which method should be used to determine the interest rate when the average accumulated expenditures for the constructed asset exceed the amounts of specific new borrowings associated with the asset? (CMA) O Prime interest rate O Cost of capital rate for the company Average rate of return on equity for the last 5 years Weighted average of the interest rates applicable to the non-construction debt of the company QUESTION 17 2.5 points Save Answer Under which of the following depreciation methods is it possible for depreciation expense to be higher in the later years of an asset's useful life? (CIA) Straight-line Declining-balance Activity method based on units of production Sum-of-the-years-digits QUESTION 18 Depreciation is computed on the original cost minus estimated salvage value under which of the following depreciation methods? (CPA) Double-Declining Balance Units of Production No Yes Oo oo QUESTION 19 Vixen Co. purchased a machine on July 1, 2018 for $400,000. The machine has an estimated useful life of five (5) years and a salvage value of $80,000. The machine is being depreciated from the date of acquisition by the 150% declining-balance method. For the year ended December 31, 2018, Vixen should record depreciation expense on this machine of (CPA) $80,000 $120,000 $48,000 $60,000 QUESTION 20 If a long-lived asset is held for sale and an impairment has occurred, It is classified as held for sale even if the criteria are not met until after the balance sheet date but before issuance of the financial statements Its carrying amount is the cost at the acquisition date if the asset is newly acquired. It is not depreciated Interest attributable to liabilities of a disposal group to which the asset belongs is not accrued. QUESTION 21 When boot is involved in an exchange having commercial substance, all gains should be deferred gains and losses are recognized in their entirety a gain or loss is computed by comparing only the fair value of the asset received with the fair value of the asset given up. only losses should be recognized QUESTION 22 (CMA) Depreciation of a plant asset is the process of Fund accumulation for the replacement of the asset Asset valuation based on current replacement cost data. Asset valuation for Statement of Financial Position purposes. O Allocation of the asset's cost to the periods of use QUESTION 23 If Dancer Company acquires machinery by issuing its own common stock, the cost of the machine should be measured by the fair market value of the stock stated value of the stock par value of the stock book value of the stock QUESTION 24 According to SFAS 34, Capitalization of Interest Costs, interest should be capitalized for assets that are (CMA) Not being used in the earning activities of the enterprise and not undergoing the activities necessary to get them ready for use Routinely produced In use or ready for their intended use in the earning activities of the entity Being constructed or produced as discrete projects for an entity's own use QUESTION 25 The period of time during which interest must be capitalized ends when the asset is abandoned, sold, or fully depreciated no further interest cost is being incurred the asset is substantially complete and ready for its intended use the activities that are necessary to get the asset ready for its intended use have begun