Assets acquired in a lump-sum purchase are valued based on:
A) Their relative fair values.
B) Their assessed valuation.
C) The present value of their future cash flows.
D) Their cost plus the difference between their cost and fair values.
Answer: A
Saturday, October 10, 2020
A company purchased a $500,000 tract of land that is intended to be the site of a new office complex. The company incurred additional costs and realized salvage proceeds as follows:
A company purchased a $500,000 tract of land that is intended to be the site of a new office complex. The company incurred additional costs and realized salvage proceeds as follows:
Demolition of existing building on site $ 75,000
Legal and other fees to close escrow 15,000
Proceeds from sale of demolition scrap 10,000
What would be the capitalized cost of the land?
A) $500,000.
B) $575,000.
C) $580,000.
D) $590,000.
Answer: C
A company purchased a three-acre tract of land for a building site for $350,000. The company demolished the old building at a cost of $12,000, but was able to sell scrap from the building for $1,500. The cost of title insurance was $900 and attorney fees for reviewing the contract was $500. Property taxes paid were $3,000, of which $250 covered the period after the purchase date. The capitalized cost of the land is:
A company purchased a three-acre tract of land for a building site for $350,000. The company demolished the old building at a cost of $12,000, but was able to sell scrap from the building for $1,500. The cost of title insurance was $900 and attorney fees for reviewing the contract was $500. Property taxes paid were $3,000, of which $250 covered the period after the purchase date. The capitalized cost of the land is:
A) $366,400.
B) $366,150.
C) $364,650.
D) $231,150.
Answer: C
A company purchased a commercial dishwasher by paying cash of $5,000. The dishwasher's fair value on the date of the purchase was $5,600. The company incurred $400 in transportation costs, $300 installation fees, and paid a $200 fine for illegal parking while the dishwasher was being delivered. For what amount will the company record the dishwasher?
A company purchased a commercial dishwasher by paying cash of $5,000. The dishwasher's fair value on the date of the purchase was $5,600. The company incurred $400 in transportation costs, $300 installation fees, and paid a $200 fine for illegal parking while the dishwasher was being delivered. For what amount will the company record the dishwasher?
A) $5,600.
B) $5,700.
C) $5,900.
D) $6,300.
Answer: B
A company purchased a commercial dishwasher by paying cash of $8,000. The dishwasher's fair value on the date of the purchase was $10,000. The company incurred $600 in transportation costs, $500 installation fees, and paid $300 annual insurance on the equipment. For what amount will the company record the dishwasher?
A company purchased a commercial dishwasher by paying cash of $8,000. The dishwasher's fair value on the date of the purchase was $10,000. The company incurred $600 in transportation costs, $500 installation fees, and paid $300 annual insurance on the equipment. For what amount will the company record the dishwasher?
A) $10,000.
B) $9,100.
C) $8,000.
D) $9,400.
Answer: B
What amount should be recorded for the purchase of the land?
A company incurred the following costs associated with the purchase of a piece of land that it will use to re-build an office building:
Purchase price of the land $ 400,000
Sale of salvaged parts already on land $ 20,000
Demolition of the old building $ 30,000
Ground-breaking ceremony (food and supplies) $ 1,500
Land preparation and leveling $ 7,500
What amount should be recorded for the purchase of the land?
A) $437,500.
B) $417,500.
C) $439,000.
D) $419,000.
Answer: B
A company purchased new equipment for $60,000. The company paid cash for the equipment. Other costs associated with the equipment were: transportation costs, $1,000 sales tax paid $3,000 and installation cost, $2,500. The cost recorded for the equipment was:
A company purchased new equipment for $60,000. The company paid cash for the equipment. Other costs associated with the equipment were: transportation costs, $1,000 sales tax paid $3,000 and installation cost, $2,500. The cost recorded for the equipment was:
A) $60,000.
B) $61,000.
C) $64,000.
D) $66,500.
Answer: D
Subscribe to:
Posts (Atom)