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Linda_us, Finance, Accounts & Homework Tutor
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Experience:  Post Graduate Diploma in Management (MBA)
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A Company Purchased Land For $350,000 Cash.

Resolved Question:

Question 1
A company purchased land for $350,000 cash. Real estate brokers' commission was $25,000 and $35,000 was spent for demolishing an old building on the land before construction of a new building could start. Under the historical cost principle, the cost of land would be recorded at
10 points
Question 2
Which of the following is not properly classified as property, plant, and equipment?
Building used as a factory.
Land used in ordinary business operations.
A truck held for resale by an automobile dealership.
Land improvement, such as parking lots and fences.
10 points
Question 3
Which of the following would not be included in the Equipment account?
Installation costs.
Freight costs.
Cost of trial runs.
Electricity used by the machine.
10 points
Question 4
Which of the following assets does not decline in service potential over the course of its useful life?
10 points
Question 5
Aber Company buys land for $145,000 on 12/31/13. As of 3/31/14, the land has appreciated in value to $152,000. On 12/31/14, the land has an appraised value of $155,400. By what amount should the Land account be increased in 2014?
10 points
Question 6
Wesley Hospital installs a new parking lot. The paving cost $45,000 and the lights to illuminate the new parking area cost $18,000. Which of the following statements is true with respect to these additions?
$45,000 should be debited to the Land account.
$18,000 should be debited to Land Improvements.
$63,000 should be debited to the Land account.
$63,000 should be debited to Land Improvements.
10 points
Question 7
A company purchases a remote building site for computer operations. The building will be suitable for operations after some expenditures. The wiring must be replaced to computer specifications. The roof is leaky and must be replaced. All rooms must be repainted and recarpeted and there will also be some plumbing work done. Which of the following statements is true?
The cost of the building will not include the repainting and recarpeting costs.
The cost of the building will include the cost of replacing the roof.
The cost of the building is the purchase price of the building, while the additional expenditures are all capitalized as Building Improvements.
The wiring is part of the computer costs, not the building cost.
10 points
Question 8
In computing depreciation, salvage value is
the fair value of a plant asset on the date of acquisition.
subtracted from accumulated depreciation to determine the plant asset's depreciable cost.
an estimate of a plant asset's value at the end of its useful life.
ignored in all the depreciation methods.
10 points
Question 9
Equipment with a cost of $225,000 has an estimated salvage value of $15,000 and an estimated life of 4 years or 10,000 hours. It is to be depreciated by the straight-line method. What is the amount of depreciation for the first full year, during which the equipment was used 2,700 hours?
10 points
Question 10
A company purchased factory equipment on April 1, 2014, for $96,000. It is estimated that the equipment will have a $12,000 salvage value at the end of its 10-year useful life. Using the straight-line method of depreciation, the amount to be recorded as depreciation expense at December 31, 2014, is
10 points
Question 11
A current liability is a debt that can reasonably be expected to be paid
within one year, or the operating cycle, whichever is longer.
between 6 months and 18 months.
out of currently recognized revenues.
out of cash currently on hand.
10 points
Question 12
Very often, failure to record a liability means failure to record a(n)
asset conversion.
10 points
Question 13
Sales taxes collected by a retailer are recorded by
crediting Sales Tax Revenue.
debiting Sales Tax Expense.
crediting Sales Taxes Payable.
debiting Sales Taxes Payable.
10 points
Question 14
The current portion of long-term debt should
be paid immediately.
be reclassified as a current liability.
be classified as a long-term liability.
not be separated from the long-term portion of debt.
10 points
Question 15
A retailer that collects sales taxes is acting as an agent for the
taxing authority.
chamber of commerce.
10 points
Question 16
Which one of the following would not be considered an advantage of the corporate form of organization?
Limited liability of stockholders.
Separate legal existence.
Continuous life.
Government regulation.
10 poin
Submitted: 2 years ago.
Category: Homework
Expert:  Linda_us replied 2 years ago.
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Linda_us, Finance, Accounts & Homework Tutor
Category: Homework
Satisfied Customers: 7269
Experience: Post Graduate Diploma in Management (MBA)
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