Listed below are five terms followed by a list of phrases that describe or characterize each of the
terms. Match each phrase with the correct term.
A) Approximation of average outstanding debt if all construction funds were borrowed.
B) Asset received is measured at fair value.
C) Both the total amount and the amount capitalized should be disclosed.
D) Account credited when assets are donated to a corporation.
E) Right granted to use a trademark or tradename within a geographic area.
111) Average accumulated expenditures
112) Revenue-donation of asset
113) Exchange of nonmonetary assets
114) Interest cost
115) Franchise
63
Listed below are five terms followed by a list of phrases that describe or characterize each of the
terms. Match each phrase with the correct term.
A) Payment for the exclusive right to use the company’s name and to sell its products within a
specified geographical area.
B) An exclusive right to manufacture a product or to use a process.
C) An exclusive right of protection given to the creator of a published work such as a song, film,
painting, photograph, book, or computer software.
D) The purchase price of a company less the fair value of the net assets acquired.
E) A word, slogan, or symbol that distinctively identifies a company, product, or service.
116) Trademark
117) Patent
119) Goodwill
120) Franchise
Listed below are five terms followed by a list of phrases that describe or characterize each of the
terms. Match each phrase with the correct term.
A) Its cost includes filling, draining, and removal of old structures.
B) Generates inventoriable costs.
C) Exclusive right to display a word, symbol, or emblem.
D) Valued at the fair value of the note or fair value of the asset received in exchange.
E) Incorporates specific probabilities of cash flows.
121) Trademark
122) Noninterest-bearing note
123) Expected cash flow approach
124) R&D performed for others
125) Land
Listed below are five terms followed by a list of phrases that describe or characterize each of the
terms. Match each phrase with the correct term.
A) Point in time to begin capitalization of software development costs.
B) The allocation of cost for intangible assets.
C) The basic principle is to value assets acquired using fair value of consideration given.
D) Wasting assets.
E) Expensed in the period incurred.
126) Amortization
127) Research and development costs
128) Natural resources
129) Technological feasibility
130) Nonmonetary exchange
Listed below are five terms followed by a list of phrases that describe or characterize each of the
terms. Match each phrase with the correct term.
A) The basic principle is to value assets acquired using fair value of consideration given.
B) Measured at fair value and recognized as a liability.
C) Exclusive right of protection given to the creator of a published work.
D) A measurement of efficiency in using depreciable assets.
E) Includes parking lots, fences, and driveways, lighting and sprinkler systems.
131) Copyright
132) Asset retirement obligations
133) Land improvements
134) Fixed asset turnover ratio
135) Nonmonetary exchange
71
Listed below are five terms followed by a list of phrases that describe or characterize each of the
terms. Match each phrase with the correct term.
A) Long-term assets that generally represent various types of rights.
B) The allocation of cost of natural resources.
C) The cost allocation of equipment.
D) Consideration given less fair value of net identifiable assets.
E) Protects against infringements on manufactured products.
136) Goodwill
137) Depreciation
138) Depletion
139) Patents
140) Intangible assets
Listed below are five terms followed by a list of phrases that describe or characterize each of the
terms. Match each phrase with the correct term.
A) Costs to bring back an asset to its original condition.
B) Price allocated in proportion to relative fair values.
C) Capitalized between points of technological feasibility and date of product release.
D) Exclusive right of protection given to the creator of a published work.
E) Revenue recorded upon receipt.
141) Software development costs
142) Donated assets
143) Lump-sum purchase
144) Copyright
145) Restoration costs
Listed below are 10 terms followed by a list of phrases that describe or characterize the terms.
Match each phrase with the correct term.
A) Exclusive right of protection given to the creator of a published work.
B) Expensed in the period incurred.
C) Includes parking lots, fences, and driveways, lighting and sprinkler systems.
D) The basic principle is to value assets acquired using fair value of consideration given.
E) Weighted average of construction expenditures.
F) An exclusive right to display a word, slogan, symbol or emblem.
G) A unique intangible asset that is not separable from the company.
H) Exclusive 20-year right to manufacture a product or use a process.
I) Incorporates cash flow probabilities into analysis.
J) Purchase price is allocated based on relative fair values.
146) Nonmonetary exchange
148) Average accumulated expenditures
149) Patent
150) Goodwill
151) Start-up costs
152) Trademark
153) Lump-sum purchases
154) Expected cash flow approach
155) Land improvements
156) Soccer Wholesale purchased land and a warehouse for $800,000. In addition to the
purchase price, Soccer Wholesale made the following expenditures related to the acquisition:
broker’s commission, $48,000; title insurance, $3,000; and miscellaneous closing costs, $8,000.
The warehouse is immediately demolished at a cost of $80,000 in anticipation of building a new
warehouse.
Required:
Determine the amount Soccer Wholesale should record as the cost of the land.
157) On July 1, 2018, Jekel & Hyde Inc. purchased land and incurred other costs relative to the
construction of a new warehouse. A summary of economic activities is listed below:
Purchase price
$185,000
Title insurance
$1,500
Legal fees to purchase land
$1,000
Cost of razing old building on lot
8,500
Proceeds from sale of salvageable materials
(1,200)
Property taxes, January 1, 2018—June 30, 2018
3,000
Cost of grading and filling building site
9,000
Cost of building construction
620,000
Interest on construction loan
12,000
Cost of constructing driveway
8,000
Cost of parking lot and fencing
12,000
Required:
Indicate the accounts that would be affected by the above transactions and the resulting balance
in each account. Apply the interest on the construction loan to the cost of the building only.
Purchase price
$185,000
Title insurance
Legal fees
Proceeds from sale of salvaged materials
(1,200)
Property tax prior to June 30
3,000
Cost of grading and filling building site
Total
Total
Total
158) Mad Hatter Enterprises purchased new equipment for $365,000, terms f.o.b. shipping point.
Other costs connected with the purchase were as follows:
State sales tax
29,200
Freight costs
5,600
Insurance while in transit
800
Insurance after equipment placed in service
1,200
Installation costs
2,000
Insurance for the first year of operations
2,400
Testing
700
Required:
Determine the capitalized cost of the equipment.
Purchase price
Sales tax
Freight
Insurance while in transit
Installation
Testing
Total cost of equipment