the proper accounting treatment of the cost of the building woul
d depend on
22) The period of time during which interest must be capitalized
ends when
23) Which of the following assets do NOT qualify for capitalizat
ion of interest costs incurred during construction of the assets?
24) When computing the amount of interest cost to be capitalize
d, the concept of “avoidable interest” refers to
25) The KingKong Corporation exchanges one plant asset for a similar plant a
sset and gives cash in the exchan ge. The exchange is NOT expe
cted to cause a material change in the future cash flows for eithe
r entity. If a gain on the disposal of the old asset is indicated, the
gain will
26) When a plant asset is acquired by issuance of common stock
, the cost of the plant asset is properly measured by the
27) The cost of a nonmonetary asset acquired in exchange for an
other nonmonetary asset and the exchange has commercial subst
ance is usually recorded at
28) Which of the following principles best describes the concept
ual rationale for the methods of matching depreciation expense
with revenues?
29) If an industrial firm uses the units-ofproduction method for computing depreciation on its only plant
asset, factory machinery, the credit to accumulated depreciation
from period to period during the life of the firm will
30) Which of the following most accurately reflects the concept
of depreciation as used in accounting?
31) Prentice Company purchased a depreciable asset for $200,0
00. The estimated salvage value is $20,000, and the estimated us
eful life is 10 years. The straightline method will be used for depreciation. What is the depreciati
on base of this asset?
32) Harrison Company purchased a depreciable asset for $100,0
00. The estimated salvage value is $10,000, and the estimated us
eful life is 10 years. The straightline method will be used for depreciation. What is the depreciati