Question Details

What are the appropriate amounts that Mooney should record for the land, warehouse, and office building, respectively 



Use the following information to answer questions 1 and 2.

Jamison Company purchased the assets of Booker Company at an auction for $1,400,000. An independent appraisal of the fair value of the assets is listed below:
Land	$475,000
Building	700,000
Equipment	525,000
Trucks	850,000

1.	Assuming that specific identification costs are impracticable and that Jamison allocates the purchase price on the basis of the relative fair values, what amount would be allocated to the Trucks?
a.	$466,667
b.	$700,000
c.	$840,000
d.	$850,000

	2.	Assuming that specific identification costs are impracticable and that Jamison allocates the purchase price on the basis of the relative fair values, what amount would be allocated to the Building?
a.	$529,730
b.	$700,000
c.	$1,275,000
d.	$384,314

	3.	On December 1, Miser Corporation exchanged 2,000 shares of its $25 par value ordinary shares held in treasury for a parcel of land to be held for a future plant site. The treasury shares were acquired by Miser at a cost of $40 per share, and on the exchange date the ordinary shares of Miser had a fair value of $50 per share. Miser received $6,000 for selling scrap when an existing building on the property was removed from the site. Based on these facts, the land should be capitalized at
a.	$74,000.
b.	$80,000.
c.	$94,000.
d.	$100,000.

4.	Storm Corporation purchased a new machine on October 31, 2010. A $1,200 down payment was made and three monthly installments of $3,600 each are to be made beginning on November 30, 2010. The cash price would have been $11,600. Storm paid no installation charges under the monthly payment plan but a $200 installation charge would have been incurred with a cash purchase. The amount to be capitalized as the cost of the machine on October 31, 2010 would be
a.	$12,200.
b.	$12,000.
c.	$11,800.
d.	$11,600.

	
 
5.	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.

6.	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.

	7.	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.




Business Management Assignment Help, Business Management Homework help, Business Management Study Help, Business Management Course Help