Here are the discussion questions to start off our first week of class. From cha

Question

Here are the discussion questions to start off our first week of class. From chapter 10, accounting for acquisition and disposition of property, plant, and equipment: 1) Two positions have normally been taken with respect to the recording of fixed manufacturing overhead as a element of the cost of plan assets constructed by a company for its own use: a) It should be excluded completely. b) It should be included at the same rate as is charged to normal operations. Discuss the circumstances or rationale that support or deny the application of these methods. 2) Provide examples of assets that do not qualify for interest capitalization. 3) Discuss how should the amount of interest capitalized be disclosed in the notes to the financial statements? How should interest revenue from temporarily invested excess funds borrowed to finance the construction of assets be accounted for? 4) Discuss what accounting treatment is normally given to the following items in accounting for plant assets: a) Additions. b) Major repairs. c) Improvements and replacements. 5) Discuss the basic accounting problem that arises in handling each of the following situations: a) Assets purchased by issuance of capital stock. b) Acquisition of plant assets by gift or donation. c) Purchase of a plant asset subject to a cash discount. d) Assets purchased on a long-term credit basis. e) An asset traded in or exchanged for another asset. f) A group of assets acquired for a lump sum.

Explanation / Answer

rate me first 1 - a2 c3 b4 a5 d

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