Question as attatched. 80% of answer correct is okay.

1) On January 1, Year 1, Entity A purchased a copper mine. The initial total cost of the mine was $600,000, and its expected residual value was $30,000. Based on the total estimated amount of copper to be extracted from the mine, Entity A determined that the depletion charge per ton extracted is $25. During Year 1, 2,000 tons of ore were extracted. What is the carrying amount of the copper mine to be reported in Entity A's December 31, Year 1, financial statements? A B C D $50,000 $550,000 $600,000 $520,000 2) An item of property, plant, and equipment costs $200,000; 30% of this cost is attributable to land, and the other 70% is attributable to a building. If the building has a salvage value of $20,000, what is the depreciable base? A B C D $120,000 $140,000 $200,000 $180,000 3) An exchange of nonmonetary assets that lacks commercial substance is based on the A Fair value of the assets given up. B C D Carrying amount of the assets given up. Net realizable value of the assets given up. Carrying amount of the assets received. 4) Under U.S. GAAP, an impairment loss on a long lived asset to be held and used is reported by an entity in A B C D 5) Income from continued operations. Extraordinary items. Discontinued operations. Other comprehensive income. During the year just ended, Entity A made the following expenditures relating to plant machinery and equipment: Renovation of a group of machines at a cost of $50,000 to secure greater efficiency in production over their remaining 5year useful lives. The project was completed on December 31. Continuing, frequent, and lowcost repairs at a cost of $35,000. A broken gear on a machine was replaced at a cost of $5,000. What total amount should be charged to repairs and maintenance? B C D 6) $90,000 $40,000 $85,000 The amount of interest cost to be capitalized to an internally constructed asset qualified for interest cost capitalization is limited to the and must not exceed the . List A A List B Average amount of accumulated expenditures for the qualified asset during the period B Amount of interest cost during the period on specific borrowing in relation to the asset C Net cash flows expected from the use or sale of the asset D Avoidable amount of interest 7) The carrying amount of an item of property, plant, and equipment equals minus its and . List A List B A B C List B Asset's historical cost Purchase price Salvage value Freightin cost Asset's historical cost Installation cost Accumulated depreciatio n D 8) Depreciable base Salvage value Impairment losses How should the effect of a change in accounting estimate be accounted for? A B C D By prospectively applying the change to current and future periods. By retrospectively applying the change to amounts reported in financial statements of prior periods. By reporting pro forma amounts for prior periods. As a priorperiod adjustment to beginning retained earnings. 9) Which costs are not part of the carrying amount of an item of PPE? A B C D 10) Asset improvement costs that increase future service potential of the asset. Asset's installation costs. Asset's freightin costs. Repair and maintenance costs. On January 1, Year 1, Entity A purchased an oil tanker depot with a 10year useful life at a cost of $800,000. At the end of the depot's useful life, Entity A is legally required to dismantle the depot. It was estimated that it would cost $150,000 to dismantle the depot at the end of its useful life. Entity A's creditadjusted riskfree rate is 5%. The present value of $1 for 10 years at 5% is 0.614. What journal entry should Entity A record on the acquisition of the depot? A Depot Expense $800,000 92,100 Cash $800,000 Liability for ARO B Depot Liability for ARO Cash 92,100 $707,900 92,100 $800,000 C Depot $950,000 Cash $800,000 Liability for ARO D Depot Cash Liability for ARO 11) 150,000 $892,100 $800,000 92,100 Under IFRS, an entire class of property, plant, and equipment may be accounted for according to the Cost Model Revaluation Model A No Ye s B C No No Ye No s D 12) Yes Yes In relation to an item of PPE purchased on January 1, Year 1, which of the following is an example of a change in accounting principle inseparable from a change in accounting estimate? At the beginning of the fifth year, the entity decided to reverse the impairment loss recognized on the item in the A previous year. At the beginning of the fifth year, the entity decided to change the depreciation method for productive equipment B from the straightline method to the sumoftheyears'digits method. C D At the beginning of the fifth year, the entity decided to stop depreciating land. At the beginning of the fifth year, it was determined that the item's useful life should be extended by 3 years. 13) On January 1, Year 1, Entity A acquired a long lived tangible asset for $400,000. On that date, it recognized a liability for an asset retirement obligation (ARO) of $120,000. The estimated useful life of the asset is 10 years with no salvage value. The creditadjusted riskfree (CARF) rate used for initial measurement of the liability for the ARO is 8%. What amount of accretion expense will be recognized in Entity A's Year 1 statement of income? A B $12,000 $41,600 C D $9,600 $52,000 14) Which of the following statements is false in relation to accounting for error correction? A B C D A correction of a priorperiod error requires a restatement of the priorperiod financial statements. The accounting for error correction is based on a retrospective approach. An error in priorperiod financial statements may result from an incorrect application of GAAP. Correction of priorperiod errors is included in net income of the period when the error was discovered. 15) On December 1, Year 1, Entity A declared and distributed a building as a property dividend to its shareholders. The excess of the building's carrying amount over its fair value on the dividend declaration day should be A B C D Reported as a loss on building remeasurement. Ignored. Reported as an extraordinary loss. Reported as a gain on building remeasurement. 16) Under IFRS, investment property may be accounted for according to the Cost Model Fair Value Model A B Yes Yes Ye No s C No Ye s D 17) No No The first step of an impairment test for a long lived asset to be held and used is the recoverability test. The recoverability test compares the asset's with the . List A List B A B Historical cost Cost Depreciable base of the Current cost to replace the asset C D 18) Fair value Carrying amount An entity bought an item of property, plant, and equipment on January 1, Year 1, for $280,000. The estimated useful life of the asset is 10 years, with a salvage value of $30,000. The entity depreciates such assets using the straightline depreciation method. What will be the carrying amount of the asset on December 31, Year 4? A B C D $150,000 $255,000 $180,000 $100,000 19) Which of the following must be subtracted from the amount paid for a mine in determination of the depletion base of the mine? A B C D The residual value of the mine. The costs of a tractor to be used in the extraction. Mine development costs to prepare the site for extraction. Restoration costs required by law to return the mine to its original condition. 20) Which of the following costs are not capitalized to the initial/historical cost of a piece of machinery purchased by an entity? A B C D Costs of advertising the new inventory to be produced by the machinery. Commission fees paid to the broker on the acquisition of the machinery. Site preparation and installation costs. Freightin and insurance costs until the machinery was ready to use