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E7-3 On March struct a small of was demolished expenditures be хр ing the land pur put in driveway

E7-3 On March struct a small of was demolished expenditures be хр ing the land pur put in driveway

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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1. Sales lax UII TactUiy ImaciImery purChaseu 2. Painting of and lettering on truck immediately upon purchase 3. Installation and testing of factory machinery 4. Real estate broker's commission on land purchased 5. Insurance premium paid for first year's insurance on new truck 6. Cost of landscaping on property purchased 7. Cost of paving parking lot for new building constructed 8. Cost of clearing, draining, and filling land 9. Architect's fees on self-constructed building $ 5,000 700 2,000 3,500 dos wod 880 7,200 17,900 13,300 10,000 000 Instructions Indicate the title of the account that would be increased for each expenditure. E7-3 On March 1, 2017, Boyd Company acquired real estate, on which it planned to con- struct a small office building, by paying $80,000 in cash. An old warehouse on the property was demolished at a cost of $8,200; the salvaged materials were sold for $1,700. Additional expenditures before construction began included $1,900 attorney's fee for work concern- ing the land purchase, $5,200 real estate broker's fee, $9,100 architect's fee, and $14,000 to put in driveways and a parking lot. Instructions (a) Determine the amount to be reported as the cost of the land. (b) For each cost not used in part (a), indicate the account to be increased. E7-4 Alysha Monet has prepared the following list of statements about depreciation. 1. Depreciation is a process of asset valuation, not cost allocation. 2. Depreciation provides for the proper matching of expenses with revenues. 3. The book value of a plant asset should approximate its fair value. 4. Depreciation applies to three
Transcribed Image Text:1. Sales lax UII TactUiy ImaciImery purChaseu 2. Painting of and lettering on truck immediately upon purchase 3. Installation and testing of factory machinery 4. Real estate broker's commission on land purchased 5. Insurance premium paid for first year's insurance on new truck 6. Cost of landscaping on property purchased 7. Cost of paving parking lot for new building constructed 8. Cost of clearing, draining, and filling land 9. Architect's fees on self-constructed building $ 5,000 700 2,000 3,500 dos wod 880 7,200 17,900 13,300 10,000 000 Instructions Indicate the title of the account that would be increased for each expenditure. E7-3 On March 1, 2017, Boyd Company acquired real estate, on which it planned to con- struct a small office building, by paying $80,000 in cash. An old warehouse on the property was demolished at a cost of $8,200; the salvaged materials were sold for $1,700. Additional expenditures before construction began included $1,900 attorney's fee for work concern- ing the land purchase, $5,200 real estate broker's fee, $9,100 architect's fee, and $14,000 to put in driveways and a parking lot. Instructions (a) Determine the amount to be reported as the cost of the land. (b) For each cost not used in part (a), indicate the account to be increased. E7-4 Alysha Monet has prepared the following list of statements about depreciation. 1. Depreciation is a process of asset valuation, not cost allocation. 2. Depreciation provides for the proper matching of expenses with revenues. 3. The book value of a plant asset should approximate its fair value. 4. Depreciation applies to three
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