Question Details

Chicago Furniture uses a variety of equipment 



1.	The cost of a purchased building includes all of the following except


	2.	A company purchased land for $70,000 cash. Real estate brokers' commission was $5,000 and $7,000 was spent for demolishing an old building on the land before construction of a new building could start. Under the cost principle, the cost of land would be recorded at


	3.	Which one of the following items is not considered a part of the cost of a truck purchased for business use?

	4.	Which of the following assets does not decline in service potential over the course of its useful life?

	5.	The four subdivisions for plant assets are

	6.	The cost of land does not include

	7.	Gagner Clinic purchases land for $110,000 cash. The clinic assumes $1,500 in property taxes due on the land. The title and attorney fees totaled $1,000. The clinic has the land graded for $2,200. What amount does Gagner Clinic record as the cost for the land?


	8.	Carey Company buys land for €50,000 on 12/31/10. As of 3/31/11, the land has appreciated in value to €50,700. On 12/31/11, the land has an appraised value of €51,800. By what amount should the Land account be increased in 2011?

	9.	Hull Company acquires land for $96,000 cash. Additional costs are as follows:
Removal of shed	$    300
Filling and grading	1,500
Salvage value of lumber of shed	120
Broker commission	1,530
Paving of parking lot	10,000
Closing costs	560
Hull will record the acquisition cost of the land as


	10.	Wesley Hospital installs a new parking lot. The paving cost ₤30,000 and the lights to illuminate the new parking area cost ₤15,000. Which of the following statements is true with respect to these additions?

	11.	Land improvements should be depreciated over the useful life of the

	12.	Mattox Company is building a new plant that will take three years to construct. The construction will be financed in part by funds borrowed during the construction period. There are significant architect fees, excavation fees, and building permit fees. Which of the following statements is true?

	13.	A company purchases a remote site building for computer operations. The building will be suitable for operations after some expenditures. The wiring must be replaced to computer specifications. The roof is leaky and must be replaced. All rooms must be repainted and recarpeted and there will also be some plumbing work done. Which of the following statements is true?

	14.	Engler Company purchases a new delivery truck for $48,000. The sales taxes are $3,000. The logo of the company is painted on the side of the truck for $1,200. The truck license is $120. The truck undergoes safety testing for $220. What does Engler record as the cost of the new truck?

	15.	All of the following factors in computing depreciation are estimates except

	16.	Presto Company purchased equipment and these costs were incurred:
Cash price	$22,500
Sales taxes	1,800
Insurance during transit	320
Installation and testing		430
Total costs	$25,050
Presto will record the acquisition cost of the equipment as

	17.	Angie- Blooms purchased a delivery van for $30,000. The company was given a $3,000 cash discount by the dealer, and paid $1,500 sales tax. Annual insurance on the van is $500. As a result of the purchase, by how much will Angie- Blooms increase its van account?

	18.	Yang Company purchased equipment on January 1 at a list price of ¥500,000, with credit terms 2/10, n/30. Payment was made within the discount period and Yang was given a ¥10,000 cash discount. Yang paid ¥25,000 sales tax on the equipment, and paid installation charges of ¥8,800. Prior to installation, Yang paid ¥20,000 to pour a concrete slab on which to place the equipment. What is the total cost of the new equipment?

19.	 Robin Company acquires a piece of land on which it intends to build a factory to produce its primary product. The land is listed for sale at $230,000, but Robin Company's real estate broker is able to negotiate a sales price of $210,000. The land contains an old office building that is razed at a cost of $12,500 ($14,500 in costs less $2,000 proceeds from salvaged materials). Robin Company pays a commission to the real estate broker of $11,500 and an attorney's fee of $3,000. On its statement of financial position at December 31, 2011, what amount will Robin Company record as the cost of the land?

	20.	Chicago Furniture uses a variety of equipment in its manufacturing facility. On Chicago Furniture's statement of financial position, the "Equipment" balance would contains all of the following costs except




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