Adama Company incurred the following costs.Indicate to which account Adama would debit each of the costs. 1. Sales tax on factory machinery purchased $5,000 Select the account to be debited Prepaid InsuranceLand ImprovementsLandEquipmentBuilding 2. Painting of and lettering on truck immediately upon purchase 700 Select the account to be debited EquipmentPrepaid InsuranceLandLand ImprovementsBuilding 3. Installation and testing of factory machinery 2,000 Select the account to be debited BuildingLandLand ImprovementsPrepaid InsuranceEquipment 4. Real estate broker’s commission on land purchased 3,500 Select the account to be debited BuildingPrepaid InsuranceLand ImprovementsEquipmentLand 5. Insurance premium paid for first year’s insurance on new truck 880 Select the account to be debited BuildingLand ImprovementsLandEquipmentPrepaid Insurance 6. Cost of landscaping on property purchased 7,200 Select the account to be debited EquipmentLandBuildingLand ImprovementsPrepaid Insurance 7. Cost of paving parking lot for new building constructed 17,900 Select the account to be debited Land ImprovementsLandBuildingPrepaid InsuranceEquipment 8. Cost of clearing, draining, and filling land 13,300 Select the account to be debited Land ImprovementsEquipmentLandBuildingPrepaid Insurance 9. Architect’s fees on self-constructed building 10,000
Adama Company incurred the following costs.Indicate to which account Adama would debit each of the costs. 1. Sales tax on factory machinery purchased $5,000 Select the account to be debited Prepaid InsuranceLand ImprovementsLandEquipmentBuilding 2. Painting of and lettering on truck immediately upon purchase 700 Select the account to be debited EquipmentPrepaid InsuranceLandLand ImprovementsBuilding 3. Installation and testing of factory machinery 2,000 Select the account to be debited BuildingLandLand ImprovementsPrepaid InsuranceEquipment 4. Real estate broker’s commission on land purchased 3,500 Select the account to be debited BuildingPrepaid InsuranceLand ImprovementsEquipmentLand 5. Insurance premium paid for first year’s insurance on new truck 880 Select the account to be debited BuildingLand ImprovementsLandEquipmentPrepaid Insurance 6. Cost of landscaping on property purchased 7,200 Select the account to be debited EquipmentLandBuildingLand ImprovementsPrepaid Insurance 7. Cost of paving parking lot for new building constructed 17,900 Select the account to be debited Land ImprovementsLandBuildingPrepaid InsuranceEquipment 8. Cost of clearing, draining, and filling land 13,300 Select the account to be debited Land ImprovementsEquipmentLandBuildingPrepaid Insurance 9. Architect’s fees on self-constructed building 10,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Adama Company incurred the following costs.
Indicate to which account Adama would debit each of the costs.
1. |
Sales tax on factory machinery purchased
|
$5,000 | Select the account to be debited Prepaid InsuranceLand ImprovementsLandEquipmentBuilding | |||
2. |
Painting of and lettering on truck immediately upon purchase
|
700 | Select the account to be debited EquipmentPrepaid InsuranceLandLand ImprovementsBuilding | |||
3. |
Installation and testing of factory machinery
|
2,000 | Select the account to be debited BuildingLandLand ImprovementsPrepaid InsuranceEquipment | |||
4. |
Real estate broker’s commission on land purchased
|
3,500 | Select the account to be debited BuildingPrepaid InsuranceLand ImprovementsEquipmentLand | |||
5. |
Insurance premium paid for first year’s insurance on new truck
|
880 | Select the account to be debited BuildingLand ImprovementsLandEquipmentPrepaid Insurance | |||
6. |
Cost of landscaping on property purchased
|
7,200 | Select the account to be debited EquipmentLandBuildingLand ImprovementsPrepaid Insurance | |||
7. |
Cost of paving parking lot for new building constructed
|
17,900 | Select the account to be debited Land ImprovementsLandBuildingPrepaid InsuranceEquipment | |||
8. |
Cost of clearing, draining, and filling land
|
13,300 | Select the account to be debited Land ImprovementsEquipmentLandBuildingPrepaid Insurance | |||
9. |
Architect’s fees on self-constructed building
|
10,000 |
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