Question 1

A used machine with a purchase price of $77,000, requiring an overhaul costing $8,000, installation costs of $5,000, and special acquisition fees of $3,000, would have a cost basis of

Accepted Answer

A)   $82,000
B)   $90,000
C)   $85,000
D)   $93,000E) A) and B)
F) A) and C)

Question 2

Classify each of the following costs associated with long-lived assets as one of the following:
-Interest on money borrowed to finance construction of new office building

Accepted Answer

A)  Buildings
B)  Machinery and equipment
C)  Land
D)  Land improvementsE) B) and C)
F) A) and D)

Question 3

On October 1, Sebastian Company acquired new equipment with a fair market value of $458,000. Sebastian received a trade-in allowance of $92,000 on the old equipment of a similar type and paid cash of $366,000. The following information about the old equipment is obtained from the account in the equipment ledger: Cost, $336,000; accumulated depreciation on December 31, the end of the preceding fiscal year, $220,000; annual depreciation, $20,000. Assuming the exchange has commercial substance, journalize the entries to record: a) the current depreciation of the old equipment to the date of trade-in and b) the exchange transaction on October 1.

Accepted Answer

a) Depreciation Expense-Equipment 15,000...

Question 4

Journalize each of the following transactions:
a) A wing costing $2,345,000 was added to the building. A new mortgage was issued for the cost.
b) Equipment was upgraded to increase its capacity to produce widgets. The upgrade cost of
$11,500 was paid in cash.
c) A major overhaul costing $8,000 on a machine increased the useful life by 4 years. The payment was made in cash.

Accepted Answer

a) Building 2,345,000
Mortgage...

Question 5

What is the cost of the land, based upon the following data?
Land purchase price
$178,000
Broker's commission
15,000
Payment for the demolition
and removal of existing building
5,000
Cash received from the sale of materials
salvaged from the demolished building
2,000

Accepted Answer

The answer of What is the cost of the land,...

Question 6

When a company establishes an outstanding reputation and has a competitive advantage because of it, the company should record goodwill on its financial statements.

Accepted Answer

A) True 
 B)False

Exam 9: Fixed Assets and Intangible Assets

Correct Answer
verified
a) Depreciation Expense-Equipment 15,000...
View Answer

Classify each of the following costs associated with long-lived assets as one of the following: -Interest on money borrowed to finance construction of new office building

Correct Answer
verified

When a company establishes an outstanding reputation and has a competitive advantage because of it, the company should record goodwill on its financial statements.

Correct Answer
verified

A used machine with a purchase price of $77,000, requiring an overhaul costing $8,000, installation costs of $5,000, and special acquisition fees of $3,000, would have a cost basis of

Correct Answer
verified

Correct Answer
verified
a) Building 2,345,000
Mortgage...
View Answer

What is the cost of the land, based upon the following data? Land purchase price $178,000 Broker's commission 15,000 Payment for the demolition and removal of existing building 5,000 Cash received from the sale of materials salvaged from the demolished building 2,000

Correct Answer
verified

Exam 9: Fixed Assets and Intangible Assets

Correct Answerverifieda) Depreciation Expense-Equipment 15,000...View AnswerShow Answer

Classify each of the following costs associated with long-lived assets as one of the following: -Interest on money borrowed to finance construction of new office building

Correct AnswerverifiedShow Answer

When a company establishes an outstanding reputation and has a competitive advantage because of it, the company should record goodwill on its financial statements.

Correct AnswerverifiedShow Answer

A used machine with a purchase price of $77,000, requiring an overhaul costing $8,000, installation costs of $5,000, and special acquisition fees of $3,000, would have a cost basis of

Correct AnswerverifiedShow Answer

Correct Answerverifieda) Building 2,345,000Mortgage...View AnswerShow Answer

What is the cost of the land, based upon the following data? Land purchase price $178,000 Broker's commission 15,000 Payment for the demolition and removal of existing building 5,000 Cash received from the sale of materials salvaged from the demolished building 2,000

Correct AnswerverifiedShow Answer

Correct Answer
verified
a) Depreciation Expense-Equipment 15,000...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
a) Building 2,345,000
Mortgage...
View Answer

Correct Answer
verified