FAR 10 PPE

Question 1

The __________ of an asset is the cost less its salvage value

Answer 1

Depreciable base

Question 2

These costs are apart of what kind of purchase?

taxes
fees
assessments
title insurance (closing cost)
construction preparation

Answer 2

Land purchase costs

Question 3

When does interest cost stop being capitalized and start being expensed?

Answer 3

The asset is ready for use

Question 4

What price is used when you have a non-interest-bearing note payable?

Answer 4

Cash Equivalent price

It equals the cash down payment plus the present value of the note payable

Question 5

What type of depreciation doesn’t recognize gain or loss on the retirement of single assets in the group?

Answer 5

Composite

Question 6

‘If you sell your warehouse and buy a new one, where is the excess proceeds reported on the income statement?

Answer 6

Part of Continuing Operations

Question 7

Yes or no?

Do you report a gain or loss with group depreciation?

Answer 7

No, the gain or loss on retirement is buried in accumulated depreciation

Question 8

How are held-for-sale assets classified?

Answer 8

Lower of cost carrying value or Net reliable value

NRV = FV - DISPOSAL COSTS

Question 9

What formula is this?

Cost - Residual Value / Total units = Expense per unit

Then you multiply that price per unit x Units sold

Answer 9

Depletion Expense per unit + Per year