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  3. 5. johnson murphy inc. acquired an asset by issuin

5. Johnson Murphy Inc. acquired an asset by issuing a $40,000 noninterest-bearing note--payable in two...

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Accounting

5. Johnson Murphy Inc. acquired an asset by issuing a $40,000 noninterest-bearing note--payable in two years. The initial valuation of Johnson's asset acquired with this note is $40,000.

Group of answer choices

True

False

6. Krisper Crme Donuts paid state, county and local sales tax on equipment acquired for use in the business. Krisper should expense the sales tax on the income statement as opposed to capitalize the sales tax as part of the initial cost of the asset.

Group of answer choices

True

False

7. When correctly applying GAAP, all the identifiable expenditures necessary to bring a manufacturing asset to its desired condition and location for use should be capitalized as part of the initial cost of property, plant, and equipment.

Group of answer choices

True

False

8. Tommys Tubas, a musical instrument company, acquired a bundle of instruments for a lump-sum purchase price. The sum of the fair values of the instruments acquired exceeded the consideration paid for them. Therefore, a gain is recorded.

Group of answer choices

True

False

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