c. part of a gain when the exchange has no commercial substance and cash is paid( cash paid / received is less than 25 % of the fair value of the exchange).
d. part of a gain when the exchange has no commercial substance and cash is received( cash paid or received is less than 25 % of the fair value of the exchange).
52. When an enterprise is the recipient of a donated asset, the account credited may be a
a. paid-in capital account. b. revenue account. c. deferred revenue account. d. all of these.
53. A plant site donated by a township to a manufacturer that plans to open a new factory should be recorded on the manufacturer ' s books at
a. the nominal cost of taking title to it. b. its fair value.
c. one dollar( since the site cost nothing but should be included in the balance sheet).
d. the value assigned to it by the company ' s directors.
54. In order for a cost to be capitalized( capital expenditure), the following must be present:
a. The useful life of an asset must be increased.