ACC 304 All Assignments ACC 304 All Assignments | Page 151
P46. Ringler Corporation exchanges one plant asset for a similar plant
asset and gives cash in the exchange. The exchange is not expected to
cause a material change in the future cash flows for either entity. If a
gain on the disposal of the old asset is indicated, the gain will
a. be reported in the Other Revenues and Gains section of the income
statement.
b. effectively reduce the amount to be recorded as the cost of the new
asset.
c. effectively increase the amount to be recorded as the cost of the
new asset.
d. be credited directly to the owner's capital account.
47. Plant assets purchased on long-term credit contracts should be
accounted for at
a. the total value of the future payments.