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atluriram, Professor
Category: Homework
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Experience:  MASTER OF COMMERCE, BACHELOR OF LAWS, COMPANY SECRETARY QUALIFICATIONS
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1) Xy company started construction of a new office building

Resolved Question:

1) Xy company started construction of a new office building on Jan 1, 2000 & moved into a finished building July 1, 2002. Of the buildings \$2,500,000 total cost, \$200,000,000 was incurred by Dec 31, 2000 in even increments throughout the year. Xy weighted average borrowing rate was 12% throughout 2000 and the actual amount of interest incurred by Xy during 2000 was \$135,000. What amount should Xy report as capitalized interest at Dec 31, 2000: A. \$120,000 B. \$135,000 C. \$150,000 D. \$240,000

2) The XY company purchased an oil well lease for \$8,000,000 at the beginning of Yr 7. During Yr 7, it drilled 10 oil wells at a cost of \$9,000,000 each. Three wells were economically feasable wells and the remaining wells were dry holes. If Xy uses the successful-efforts approach to determine the asset cost, the capitalized cost is:
A. \$9,000,000 B. \$27,000,000 C. \$35,000,000 D. \$98,000,000

3) Xy Corp. acquired a new machine on Jan 2, Yr 1 at a cost of \$63,000. The machine had an expected life of 4 yrs and a salvage value of \$3,000. If Xy uses the sum of the Yrs digitis method of depreciation, the depreciation expense record in Yr 3 is:
A. \$8,000 B. \$12,000 C. \$16,000 D. \$20,000

4) Xy Corp. acquired a new machine on Jan 2, Yr 1 at a cost of \$63,000. The machine had an expected life of 4 yrs and a salvage value of \$3,000. If Xy uses the straight line method of depreciation, the depreciation expense record in Yr 4 is:
A. \$8,000 B. \$12,000 C. \$15,000 D. \$20,000

5) Xy Corp. acquired a new machine on Jan 2, Yr 1 at a cost of \$63,000. The machine had an expected life of 4 yrs and a salvage value of \$3,000. If Xy uses the double-declining method of depreciation, the depreciation expense record in Yr 2 is:
A. \$11,813 B. \$15,000 C. \$15,750 D. \$31,500

6) Xy company sold equipm,ent that originally cost \$50,000 for \$12,000. The asset had accumulated depreciation of \$30,000 at the end of the previous fiscal Yr. Depreciation expense to the date of the sale for the current fiscal Yr is \$4,000. Which of the following line items related to this sale would appear in the income statement for Xy in the current fiscal Yr? A. Extraordinary gain of \$8,000 B. Extraordinary loss of \$8,000 C. Ordinary gain of \$4,000 D. Ordinary loss of \$4,000

7) Xy sold a machine. The machine had accumulated depreciation of \$25,000 and a salvage value of \$3,000. If the machine sold for \$8,000 and a gain of \$2,000 is recognized on the sale, the original cost of the machine was:
A. \$27,000 B. \$31,000 C. \$33,000 D. \$35,000

8) Xy Company purchased a new piece of machinery early in Jan of the current fiscal Yr for \$35,000. Xy spent \$1,000 for freight on the equipment and \$3,000 to have the machine installed. Xy estimated the salvage value of the machine to be \$3,000 and the useful life to be 10 Yrs. Using the Straight-line method of depreciation, the expense for the current fiscal Yr would be:
A. \$3,100 B. \$3,200 C. \$3,400 D. \$3,600
Submitted: 4 years ago.
Category: Homework
Expert:  atluriram replied 4 years ago.

I undertook the assignment and will submit the answer within 24 hours

with regards
atluri ramesh
Expert:  atluriram replied 4 years ago.

You need to spend \$3 to view this post. Add Funds to your account and buy credits.
atluriram, Professor
Category: Homework
Satisfied Customers: 533
Experience: MASTER OF COMMERCE, BACHELOR OF LAWS, COMPANY SECRETARY QUALIFICATIONS

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