Sample CPA Exam Questions
1. Cole Co. began constructing a building for its own use in January 2008. During 2008, Cole incurred interest of $50,000 on specific construction debt and $20,000 on other borrowings. The amount of interest that could have been avoided if the building construction expenditures had been used to pay off debt during 2008 was $40,000.What amount of interest cost should Cole capitalize?
(a) $20,000
(b) $40,000
(c) $50,000
(d) $70,000
2. Which of the following costs of goodwill should be capitalized?
|
|
Maintaining |
Developing |
|
|
Goodwill |
Goodwill |
|
(a) |
Yes |
No |
|
(b) |
No |
No |
|
(c) |
Yes |
Yes |
|
(d) |
No |
Yes |