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ACC 577 Week 3 Quiz (100 % Correct Answers)
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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