ACCT 2001 Chapter : Final Exam Practice Problems MC

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azuremammoth471

15 Mar 2019

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Chapter 9: reporting and analyzing long-lived assets: the items below represent expenditures related to the construction of a new office building: The proper balances for the land account and the building account should be: On january 1, 20x4, guard security service purchased an alarm monitoring system for ,000. The system is expected to be used for 4 years, after which it can be sold for ,000 (salvage value). What is the book value of the equipment on december 31, 20x5, if guard uses the straight-line method of depreciation: ,000, ,000, ,000, ,000. If guard uses the double-declining-balance method of depreciation, what is depreciation expense for 20x5: ,000, ,000. What is the depreciation expense in year 2 under the double declining-balance method: ,400, ,480. An asset that cost ,000 and has accumulated depreciation of ,000 is sold for ,000. Use the following to answer questions 11 to 15: The blooming miracles flower shop bought a delivery van on january 1, 2012.

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Venable Company was organized on January 1. During the first year of operations, the following plant asset expenditures and receipts were recorded in random order.

Debit
1.	Cost of filling and grading the land	$ 4,500
2.	Full payment to building contractor	680,500
3.	Real estate taxes on land paid for the current year	4,500
4.	Cost of real estate purchased as a plant site (land $115,000 and building $46,500)	161,500
5.	Excavation costs for new building	35,500
6.	Architectâs fees on building plans	12,500
7.	Accrued real estate taxes paid at time of purchase of real estate	2,000
8.	Cost of parking lots and driveways	13,500
9.	Cost of demolishing building to make land suitable for construction of new building	26,000
		$940,500
Credit
10.	Proceeds from salvage of demolished building	$ 3,500

Analyze the foregoing transactions using the following column headings. Insert the amounts in the appropriate columns. (If an amount reduces the account balance then enter with a negative sign preceding the number, e.g. -15,000 or parenthesis, e.g. (15,000).)

*Item*	*Land*	*Buildings*	*Other Accounts*
1.	$	$	$
2.
3.
4.
5.
6.
7.
8.
9.
*10.*
	$	$

olivegoat908

The expenditures and receipts below are related to land, landimprovements, and buildings acquired for use in a businessenterprise. The receipts are enclosed in parentheses.

(a)	Money borrowed to pay building contractor (signed a note)	$(282,800	)
(b)	Payment for construction from note proceeds	282,800
(c)	Cost of land fill and clearing	11,770
(d)	Delinquent real estate taxes on property assumed bypurchaser	7,920
(e)	Premium on 6-month insurance policy during construction	11,460
(f)	Refund of 1-month insurance premium because constructioncompleted early	(1,910	)
(g)	Architectâs fee on building	26,160
(h)	Cost of real estate purchased as a plant site (land $201,700and building $54,400)	256,100
(i)	Commission fee paid to real estate agency	8,410
(j)	Installation of fences around property	4,280
(k)	Cost of razing and removing building	11,740
(l)	Proceeds from salvage of demolished building	(5,090	)
(m)	Interest paid during construction on money borrowed forconstruction	12,550
(n)	Cost of parking lots and driveways	20,330
(o)	Cost of trees and shrubbery planted (permanent in nature)	13,380
(p)	Excavation costs for new building	3,010

identify each item by letter and list the items in columnarform, using the headings shown below. All receipt amounts should bereported in parentheses. For any amounts entered in the OtherAccounts column, also indicate the account title.(Enter receipt amounts using either a negative signpreceding the number e.g. -45 or parentheses e.g. (45). If no entryis required in other accounts

Item

Land

Land
Improvements

Building

Other Accounts

a
b
c
d
e
f
g
h
i
j
k
l
m
n
o
p

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ACCT 2001 Chapter : Final Exam Practice Problems MC

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