Question Details

Jenks Co. incurred the following costs for one 



	1.	Chase County owned an idle parcel of real estate consisting of land and a factory building. Chase gave title to this realty to Patton Co. as an incentive for Patton to establish manufacturing operations in the County. Patton paid nothing for this realty, which had a fair market value of $250,000 at the date of the grant. Patton should record this nonmonetary transaction as a
a.	memo entry only.
b.	credit to Contribution Revenue for $250,000.
c.	credit to extraordinary income for $250,000.
d.	credit to Donated Capital for $250,000.

	2.	On September 10, 2010, Jenks Co. incurred the following costs for one of its printing presses:
Purchase of attachment	$55,000
Installation of attachment	5,000
Replacement parts for renovation of press	18,000
Labor and overhead in connection with renovation of press	7,000
Neither the attachment nor the renovation increased the estimated useful life of the press. However, the renovation resulted in significantly increased productivity. What amount of the costs should be capitalized?
a.	$0.
b.	$67,000.
c.	$78,000.
d.	$85,000.

	3.	On January 2, 2010, York Corp. replaced its boiler with a more efficient one. The following information was available on that date:
Purchase price of new boiler	$150,000
Carrying amount of old boiler	10,000
Fair value of old boiler	4,000
Installation cost of new boiler	20,000
The old boiler was sold for $4,000. What amount should York capitalize as the cost of the new boiler?
a.	$170,000.
b.	$166,000.
c.	$160,000.
d.	$150,000.





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