Question Details

Siegle Company exchanged 400 shares of Guinn Company 



1.	Horner Company buys a delivery van with a list price of $30,000. The dealer grants a 15% reduction in list price and an additional 2% cash discount on the net price if payment is made in 30 days. Sales taxes amount to $400 and the company paid an extra $300 to have a special horn installed. What should be the recorded cost of the van?
a.	$24,990.
b.	$25,645.
c.	$25,690.
d.	$25,390.

2.	On August 1, 2010, Hayes Corporation purchased a new machine on a deferred payment basis. A down payment of $3,000 was made and 4 monthly installments of $2,500 each are to be made beginning on September 1, 2010. The cash equivalent price of the machine was $12,000. Hayes incurred and paid installation costs amounting to $500. The amount to be capitalized as the cost of the machine is
a.	$12,000.
b.	$12,500.
c.	$13,000.
d.	$13,500.

	3.	On April 1, Mooney Corporation purchased for $855,000 a tract of land on which was located a warehouse and office building. The following data were collected concerning the property:
	Current Assessed Valuation	Vendor- Original Cost
Land	$300,000	$280,000
Warehouse	200,000	180,000
Office building	  400,000	  340,000
	$900,000	$800,000
What are the appropriate amounts that Mooney should record for the land, warehouse, and office building, respectively?
a.	Land, $280,000; warehouse, $180,000; office building, $340,000.
b.	Land, $300,000; warehouse, $200,000; office building, $400,000.
c.	Land, $299,250; warehouse, $192,375; office building, $363,375.
d.	Land, $285,000; warehouse, $190,000; office building, $380,000.

	4.	On August 1, 2010, Mendez Corporation purchased a new machine on a deferred payment basis. A down payment of $2,000 was made and 4 annual installments of $6,000 each are to be made beginning on September 1, 2010. The cash equivalent price of the machine was $23,000. Due to an employee strike, Mendez could not install the machine immediately, and thus incurred $300 of storage costs. Costs of installation (excluding the storage costs) amounted to $800. The amount to be capitalized as the cost of the machine is
a.	$23,000.
b.	$23,800.
c.	$24,100.
d.	$26,000.

5.	Siegle Company exchanged 400 shares of Guinn Company common stock, which Siegle was holding as an investment, for equipment from Mayo Company. The Guinn Company common stock, which had been purchased by Siegle for $50 per share, had a quoted market value of $58 per share at the date of exchange. The equipment had a recorded amount on Mayo's books of $21,000. What journal entry should Siegle make to record this exchange?
	a.	Equipment 		20,000
			Investment in Guinn Co. Common Stock 			20,000
	b.	Equipment 		21,000
			Investment in Guinn Co. Common Stock 			20,000
			Gain on Disposal of Investment 			1,000
	c.	Equipment 		21,000
		Loss on Disposal of Investment 		2,200
			Investment in Guinn Co. Common Stock 			23,200
	d.	Equipment 		23,200
			Investment in Guinn Co. Common Stock 			20,000
			Gain on Disposal of Investment 			3,200





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