Week 3 Quiz All Questions Details given below ( Please Check )
Question 1
During 2004 , Yvo Corp . installed a production assembly line to manufacture furniture . In 2005 , Yvo purchased a new machine and rearranged the assembly line to install this machine . The rearrangement did not increase the estimated useful life of the assembly line , but it did result in significantly more efficient production . The following expenditures were incurred in connection with this project : What amount of the above expenditures should be capitalized in 2005 ?
Question 2
On January 2 , 2005 , Well Co . purchased 10 % of Rea , Inc .' s outstanding common shares for $ 400,000 . Well is the largest single shareholder in Rea , and Well ' s officers are a majority on Rea ' s board of directors . Rea reported net income of $ 500,000 for 2005 , and paid dividends of $ 150,000 . In its December 31 , 2005 , balance sheet , what amount should Well report as investment in Rea ?
Question 3
On December 31 , 2004 , Roth Co . issued a $ 10,000 face value note payable to Wake Co . in exchange for services rendered to Roth . The note , made at usual trade terms , is due in nine months and bears interest , payable at maturity , at the annual rate of 3 %. The market interest rate is 8 %. The compound interest factor of $ 1 due in nine months at 8 % is . 944 . At what amount should the note payable be reported in Roth ' s December 31 , 2004 balance sheet ?