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[answered] A large plot of land was donated by the City of Speedway to


  1. A large plot of land was donated by the City of Speedway to Smith Company to entice the company to build a plant and provide new jobs in the community.? The land should be recorded on Smith's books at:

    A.

    the land's market value.

    B.

    the cost of the attorney's fees involved in handling the transaction.

    C.

    the value assigned by Smith's board of directors.

    D.

    no more than one dollar because the land was obtained for no cost.

1 points ??


QUESTION 2
  1. The Smith Company hired an architect to design plans and a construction firm to build a new office building on a parcel of land it owns.? The following data relates to the building:

    ????????? Price paid to the construction firm????????? ? ? ?? ??? $320,000

    ????????? Architect?fees???????????????????????????????????????????????? ? ? ?? 18,000

    ????????? Permit?fees?????????????????????????????????????????????????????? ? ? ?? 1,200

    ????????? Property taxes during the construction period?????????? 800

    ????????? Insurance premium for first year of operations?????? 3,000

    ????????? Property taxes during the first year of operations? 6,000

    The total acquisition cost of the new building is:

    A.

    $349,000

    B.

    $340,000

    C.

    $338,000

    D.

    $320,000

1 points ??


QUESTION 3
  1. Smith Company purchased a new piece of equipment on?July 1, 2007 at a cost of $900,000.? The equipment has an estimated useful life of 5 years and an estimated salvage value of $75,000.? The current year end is 12/31/08.? Smith records depreciation to the neared month.

    What is straight-line depreciation for 2008?


    A.

    $82,500

    B.

    $90,000

    C.

    $165,000

    D.

    $180,000

1 points ??


QUESTION 4
  1. The cost of land does?not?include

    A.

    Costs of grading, filling, draining, and clearing.

    B.

    costs of removing old buildings.

    C.

    costs of improvements with limited lives.

    D.

    special assessments.

1 points ??


QUESTION 5
  1. If a corporation purchases a lot and building and subsequently tears down the building and uses the property as a parking lot, the proper accounting treatment of the cost of the building would depend on the

    A.

    significance of the cost allocated to the building in relation to the combined cost of the lot and building.

    B.

    length of time for which the building was held prior to its demolition.

    C.

    contemplated future use of the parking lot.

    D.

    intention of management for the property when the building was acquired.

1 points ??


QUESTION 6
  1. Smith Manufacturing purchased a machine for $65,000, on January 2, 2014.? At the date of purchase, Jacobson incurred the following additional costs:

    ????????? Loss on sale of old machine??? $2,000

    ??????????Freight-in?????????????????????????????????????900

    ????????? Installation costs????????????????????? 1,500

    ????????? Breaking-in costs???????????????????????? 650

    What is the cost of the machine?

    ????

    A.

    $65,000

    B.

    $67,400

    C.

    $68,050

    D.

    $69,400

1 points ??


QUESTION 7
  1. An improvement made to a machine increased its fair market value and its production capacity by 25% without extending the machine's useful life.? The cost of the improvement should be

    A.

    expensed.

    B.

    debited to accumulated depreciation.

    C.

    capitalized in the machine account.

    D.

    allocated between accumulated depreciation and the machine account.

1 points ??


QUESTION 8
  1. Smith Company purchased a new piece of equipment on?July 1, 2007 at a cost of $900,000.? The equipment has an estimated useful life of 5 years and an estimated salvage value of $75,000.? The current year end is 12/31/08.? Smith records depreciation to the neared month.

    What is double-declining-balance depreciation for 2008?


    A.

    $216,000

    B.

    $288,000

    C.

    $330,000

    D.

    $360,000

1 points ??


QUESTION 9
  1. A change in estimate should

    A.

    result in restatement of prior period statements.

    B.

    be handled in current and future periods.

    C.

    be handled in future periods only.

    D.

    be handled retroactively.

1 points ??


QUESTION 10
  1. Smith Company purchased a new piece of equipment on?July 1, 2007 at a cost of $900,000.? The equipment has an estimated useful life of 5 years and an estimated salvage value of $75,000.? The current year end is 12/31/08.? Smith records depreciation to the neared month.

    What is sum-of-the-year?s-digits depreciation for 2008?


    A.

    $219,999

    B.

    $247,500

    C.

    $270,000

    D.

    $275,000


 


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